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Economy in Brief

U.S. Initial Weekly Claims For Jobless Insurance Rebound But Still Trending Lower
by Tom Moeller May 14, 2009

A stutter-step was taken by the U.S. job market last week. Initial claims for unemployment insurance increased 32,000 to 637,000 and that recovered all of the prior week's decline. Nevertheless, claims remained down sharply from their March high of 674,000. The four-week average of claims, which smoothes out some of the volatility in the weekly numbers, ticked up to 630,500, still near the lowest level since mid-February. Initial claims of 610,000 was the Consensus expectation for claims last week.

The Labor Department indicated that the largest increases in initial claims for the week ending May 2 were in Illinois (+2,052), Kansas (+2,025), Puerto Rico (+1,781), Indiana (+1,051), and Ohio (+1,013), while the largest decreases were in New York (-13,386), Michigan (-10,952), North Carolina (-8,988), Massachusetts (-3,705), and Connecticut (-2,802).

While initial claims for jobless insurance benefits have been trending higher around the country, the increases versus last year are quite notable in several states. Year-to-year, claims have roughly doubled in Texas, Michigan, Massachusetts, Maine, Ohio, New Hampshire, and Connecticut. In many other states claims have risen by one-half including New York, New Jersey, Pennsylvania, Washington, Maryland and Wisconsin.

Layoffs may have eased, but the pace of rehiring of unemployed workers remains depressed. Continuing claims for unemployment insurance increased again to another record high of 6,560,000 and they remain twice the year ago level. The series dates back to 1966. The four-week average of continuing claims also rose to another record of 6,337,250. Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.

The lack of hiring continued to push the insured unemployment rate higher to 4.9%. That level was more than double last April and the highest level 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.Clearly, the latest weekly figure understates labor market distress in some states. The highest insured unemployment rates in the week ending April 25 were in Michigan (7.8 percent), Oregon (7.5), Pennsylvania (6.5), Wisconsin (6.4), Nevada (6.3), Idaho (6.1), Puerto Rico (5.9), Vermont (5.8), Alaska (5.7), and Rhode Island (5.7).

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

Comparing patterns of default among prime and subprime mortgages from the Federal Reserve Bank of Chicago is available here.

Unemployment Insurance (000s)  05/09/09 05/02/09 04/25/09 Y/Y 2008 2007 2006 
Initial Claims 637 635 635 69.9% 420 321 313
Continuing Claims -- 6,560 6,358 114.2% 3,342 2,552 2,459
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