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Economy in Brief

U.S. Initial Claims for Jobless Insurance Rise To The Highest Level Since 1982; Continuing Claims Reach A Record
by Tom Moeller April 2, 2009

There has been no letup in the U.S. labor market's distress. Initial claims for unemployment insurance rose last week to the highest level since the sharp recession of 1982. The figure of 669,000 was up from an unrevised 657,000 during the prior week and it surpassed Consensus expectations for 650,000 claims.

The Labor Department indicated that the largest increases in initial claims for the week ending March 21 were in California (+6,720), Missouri (+2,942), Kansas (+2,018), Oklahoma (+1,406), and Iowa (+1,134), while the largest decreases were in Texas (-4,822), New York (-3,172), Tennessee (-2,707), Illinois (-1,485), and Virginia (-1,407).

Continuing claims for unemployment insurance reached yet another record high of 5,728,000 and remained nearly double that of last March. The series dates back to 1966. The four-week average of continuing claims also rose to another record of 5,496,500. 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 is not at a record high. It rose to 4.3% 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 4.3% insured unemployment rate by far understates labor market distress in some states. The highest insured unemployment rates in the week ending March 14 were in Michigan (8.1 percent), Oregon (7.7), Rhode Island (7.3), Idaho (7.2), Pennsylvania (7.0), Wisconsin (6.8), Nevada (6.3), Montana (6.1), Alaska (6.0), and Vermont (6.0).

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

Fed Confronts Financial Crisis by Expanding Its Role as Lender of Last Resort from the Federal Reserve Bank of Dallas can be found here.

A Framework for Analyzing Bank Lending is Tuesday's speech by Fed Governor Elizabeth A. Duke and it is available here.

Unemployment Insurance (000s)  03/28/09 03/21/09 03/13/09 Y/Y 2008 2007 2006 
Initial Claims 669 657 644 72.0% 420 321 313
Continuing Claims -- 5,728 5,567 95.8% 3,342 2,552 2,459
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