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Economy in Brief

U.S. Initial Jobless Insurance Claims Slip Again Though Continuing Claims Reach Another Record
by Tom Moeller May 28, 2009

Another tenuous sign improvement in the labor market came from last week's decline in initial claims for unemployment insurance, down a modest 13,000 to 623,000. That followed an upwardly revised level during the prior week of 636,000. Though still at a high level, initial claims are down from their March peak of 674,000. The four-week average of claims, which smoothes out some of the volatility in the weekly numbers, ticked down to 626,750, near the lowest level since mid-February. The Consensus expectation was for 630,000 claims last week.

The Labor Department indicated that the largest increases in initial claims for the week ending May 16 were in California (+5,447), North Carolina (+2,693), Georgia (+1,595), Washington (+764), and Florida (+528), while the largest decreases were in Michigan (-9,758), Kentucky (-4,323), Illinois (-3,425), Indiana (-3,081), and Ohio (-2,522).

Despite the improvement in initial claims, the job market remains notably weak. Continuing claims for unemployment insurance, which provide an indication of workers' ability to find employment increased to another record high of 6,788,000, more than twice the year ago level. The series dates back to 1966. Further indicating that the job market remains weak, the four-week average of continuing claims also rose to another record of 6,608,250.

The lack of hiring continued to push the insured unemployment rate higher to 5.1%. 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 May 9 were in Oregon (7.3 percent), Michigan (7.1), Nevada (6.4), Pennsylvania (6.4), Puerto Rico (6.2), Wisconsin (6.0), Idaho (5.7), California (5.5), North Carolina (5.5), and Illinois (5.4).

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

The recession in perspective from the Federal Reserve Bank of Minneapolis can be found here.

Unemployment Insurance (000s)  05/23/09 05/16/09 05/09/09 Y/Y 2008 2007 2006 
Initial Claims 623 636 643 64.8% 420 321 313
Continuing Claims -- 6,788 6,678 118.8% 3,342 2,552 2,459
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