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Economy in Brief

U.S. Initial Claims for Unemployment Insurance Fall Back
by Tom Moeller April 16, 2009

Initial claims for unemployment insurance gave another indication that the worst of the labor market's deterioration is moderating. The level of 610,000 claims last week was down from an upwardly revised 663,000 and it was the second consecutive weekly fall. Consensus expectations for 660,000 claims.

The Labor Department indicated that the largest increases in initial claims for the week ending April 4 were in Michigan (+5,408), Missouri (+4,986), Texas (+3,734), New Jersey (+2,368), and Pennsylvania (+2,194), while the largest decreases were in California (-4,708), Ohio (-2,716), Alabama (-2,421), Florida (-1,539), and Wisconsin (-1,078).

Continuing claims for unemployment insurance reached yet another record high of 6,022,000 and now they have more than doubled the year ago level. The series dates back to 1966. The four-week average of continuing claims also rose to another record of 5,796,000. 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 is not at a record high. It rose slightly to 4.5% 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 4.4% insured unemployment rate by far understates labor market distress in some states. The highest insured unemployment rates in the week ending March 28 were in Michigan (8.0 percent), Oregon (7.9), Rhode Island (7.1), Idaho (7.0), Wisconsin (7.0), Pennsylvania (6.7), Nevada (6.2), Alaska (6.0), Montana (6.0), and Vermont (5.9).

Employment covered under the unemployment insurance program has risen sharply. The Labor Department indicated that 133.9 million workers were covered and that total amounts to 87% of the civilian labor force. The percentage has been roughly stable for the last ten years but it is up sharply from 60% to 65% in the mid-1970s.

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

Recession or Depression? Part II from the Federal Reserve Bank of St. Louis can be found here.

What's Under The Tarp?, also from the St. Louis Fed, is available here.

Unemployment Insurance (000s)  04/11/09 04/04/09 03/28/09 Y/Y 2008 2007 2006 
Initial Claims 610 663 674 65.3% 420 321 313
Continuing Claims -- 6,022 5,850 102.4% 3,342 2,552 2,459
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