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Economy in Brief

U.S. Initial Claims For Unemployment Insurance Highest Since 1982; Continuing Claims Another Record
by Tom Moeller February 26, 2009

The U.S. labor market weakened ever further as initial claims for unemployment insurance rose to their highest level since 1982. The Labor Department indicated that initial claims for unemployment insurance jumped last week 36,000 to 667,000 and the prior week's figure was revised up slightly. The latest level again surpassed Consensus expectations for 625,000 initial claims.

The Labor Department indicated that in the week ending February 14, the largest increases in claims were in New Jersey (+2,093), Virginia (+912), Rhode Island (+493), Vermont (+106), and South Dakota (+22), while the largest decreases were in California (-16,550), Kentucky (-7,741), Pennsylvania (-6,547), Illinois (-6,248), and New York (-3,955)

Extreme labor market stress was shown by a the 114,000 increase in continuing claims for unemployment insurance. That followed an upwardly revised 178,000 increase during the prior week. At 5,112,000, the level of continuing claims set yet another record. The series dates back to 1966. The four-week average of continuing claims rose 89,300 to 4,932,2500. Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.

Though the latest level of continuing claims was a record, the labor force has grown as well, by more than 27% over the last twenty years. Therefore, the insured rate of unemployment was not at a new record as it ticked higher to 3.8% which was the highest since 1983. During the last ten years there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics. The highest insured unemployment rates in the week ending February 7 were in Michigan (7.5 percent), Oregon (7.3), Idaho (7.0), Wisconsin (6.4), Pennsylvania (6.2), Nevada (5.9), Montana (5.7), Rhode Island (5.7), Alaska (5.6), Indiana (5.5), and New Jersey (5.5).

The unemployment insurance claim data is available in Haver's WEEKLY database.

Unemployment Insurance (000s)  02/20/09 02/13/09 02/06/09 Y/Y 2008 2007 2006 
Initial Claims 667 631 627 85.8% 420 321 313
Continuing Claims -- 5,112 4,998 86.3% 3,342 2,552 2,459
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