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Economy in Brief

U.S. Initial Claims For Jobless Insurance Fell Back
by Tom Moeller March 5, 2009

Weakness in the U.S. labor market eased slightly last week. A 31,000 decline in initial claims for unemployment insurance reversed the gain recorded in the prior week, which had brought claims to a level not seen since 1982. The Labor Department indicated that initial claims for unemployment insurance fell last week to 639,000 from 670,000, a higher figure than initially reported. The latest reading was lower than Consensus expectations for 650,000 initial claims.

The Labor Department will release the February payroll employment figures tomorrow. For last month, claims averaged 642,000 versus the January average of 561,000. During the last ten years there has been an 83% correlation between the level of initial claims and the month-to-month change in nonfarm payrolls.

In the week ending February 21 the largest increases in claims were in Illinois (+3,791), Massachusetts (+3,438), Missouri (+3,027), Ohio (+2,731), and California (+2,677), while the largest decreases were in Florida (-3,586), Virginia (-3,490), New York (-3,420), Michigan (-3,373), and New Jersey (-2,266).

Continuing claims for unemployment insurance eased a slight 14,000 after two weeks of triple digit increase. At 5,106,000, the level of continuing claims remained near the record level. The series dates back to 1966. The four-week average of continuing claims rose 76,800 to 5,011,000. 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 nearly 30% over the last twenty years. Therefore, the insured rate of unemployment was not at a new record and it remained stable week-to-week at 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 rates of unemployment in the week ending February 14 were in Michigan (8.2 percent), Oregon (7.3), Idaho (7.1), Pennsylvania (6.7), Wisconsin (6.5), Rhode Island (6.2), Alaska (6.0), Nevada (6.0), Montana (5.8), and Puerto Rico (5.8).

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

The Fed's latest Beige Book covering regional economic conditions can be found here.

Unemployment Insurance (000s)  02/28/09 02/21/09 02/14/09 Y/Y 2008 2007 2006 
Initial Claims 639 670 631 85.8% 420 321 313
Continuing Claims -- 5,106 5,120 81.8% 3,342 2,552 2,459
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