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Economy in Brief

U.S. Initial Unemployment Insurance Claims Continue To Move Sideways
by Tom Moeller July 6, 2009

Despite the week-to-week gyration, initial claims for unemployment insurance have moved sideways since April, trending slightly downward. Reported Thursday, claims edged down last week by 16,000 to 614,000 after an upwardly revised 18,000 increase during the week prior. The latest level was off from the March peak of 674,000. The four-week average of claims, which smoothes out some of the volatility in the weekly numbers, also fell slightly to 615,250 which was its lowest level since mid-February. The latest weekly level roughly matched Consensus expectations.

The Labor Department indicated that the largest increases in initial claims for the week ending June 20 were in California (+14,570), New Jersey (+3,170), Oregon (+3,062), Maryland (+2,342), and Michigan (+2,032), while the largest decreases were in Missouri (-5,753), Pennsylvania (-3,037), Texas (-2,759), Alabama (-1,926), and Florida (-1,894).

Also suggesting improvement in the job market was a 53,000 decline in continuing claims for unemployment insurance which reversed all of the prior week's gain. Weekly claims were down slightly from their May high. Continuing claims provide an indication of workers' ability to find employment. At 6,702,000, however, claims remained more than twice the year ago level. The four-week average of continuing claims again fell just slightly from their record high. The series dates back to 1966.

These improvements in the weekly claims figures have led to a leveling out of the insured unemployment rate. It slipped to 5.0% where it has been for the last seven weeks. Nevertheless, job market distress is evidenced by the fact that the level remained more than double that of June 2008 and 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 unemployment rates in the week ending June 13 were in Michigan (7.5 percent), Oregon (6.7), Puerto Rico (6.6), Nevada (6.3), Pennsylvania (6.2), Wisconsin (5.7), California (5.4), South Carolina (5.3), Arkansas (5.2), Illinois (5.2), and North Carolina (5.2).

The unemployment insurance claims data is available in Haver's WEEKLY database and the state data is in the REGIONW database.

Reply to Generalizing the Taylor Principle: A Comment from the Federal Reserve Bank of Kansas City can be found here.

Unemployment Insurance (000s)  06/27/09 06/20/09 06/13/09 Y/Y 2008 2007 2006 
Initial Claims 614 630 612 51.6% 420 321 313
Continuing Claims -- 6,702 6,755 112.6% 3,342 2,552 2,459
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