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Economy in Brief

U.S. Weekly Jobless Insurance Claims Fall To Lowest Since January
by Tom Moeller October 8, 2009

The labor market signaled improvement again. Initial claims for unemployment insurance fell last week to the lowest level since early-January. The Labor Department indicated that claims fell to 521,000 from an upwardly revised 554,000 during the prior week. Both figures are down sharply from the peak reached in March of 674,000 claims. The latest decline contrasted with Consensus expectations for a smaller decline to 540,000 claims. The largest decreases in initial claims during the week ending September 26 were in New York (-2,253, 14.1% y/y), North Carolina (-1,609, 26.0% y/y), South Carolina (-1,159, -7.8% y/y), Arkansas (-818, 39.6% y/y), and Florida (-734, 37.0% y/y). while the largest increases were in California (+4,467, 36.7% y/y), Ohio (+3,421, 30.2% y/y), Illinois (+1,815, 51.2% y/y), Missouri (+1,049, 43.0% y/y), and Tennessee (+1,048, 68.3% y/y).

Continuing claims for unemployment insurance during the latest week fell 72,000 to their lowest level since late-March. The decline continues to owe partially to the exhaustion of benefits. Continuing claims provide an indication of workers' ability to find employment. The four-week average of continuing claims fell modestly to 6,144,250. This series dates back to 1966.

Extended benefits for unemployment insurance rose sharply for the fourth consecutive week. Through mid-September extended benefits averaged 465,295. Congress is now debating who should qualify for another benefits extension. The House passed a bill last month lengthening benefits by 13 weeks for individuals in high-unemployment states.

The insured rate of unemployment slipped to 4.5% and matched its lowest since early-April The rate reached a high of 5.2% during late-June. 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 September 19 were in Puerto Rico (6.1 percent), Oregon (5.3), Nevada (5.2), Pennsylvania (5.0), California (4.9), Michigan (4.8), Wisconsin (4.7), Arkansas (4.6), North Carolina (4.6), and South Carolina (4.5). The lowest rates were in North Dakota (1.0%), South Dakota (1.1), Virginia (2.1), Wyoming (2.5), Maine (2.5), Texas (2.6), Colorado (3.0), Minnesota (3.1), Maryland (3.1), Mississippi (3.5), New York (3.5), Florida (3.9), and Georgia (3.9). The unemployment insurance claims data is available in Haver's WEEKLY database and the state data is in the REGIONW database.

Was Monetary Policy Optimal During Past Deflation Scares? from the Federal Reserve Bank of Kansas City is available here.
 

Unemployment Insurance (000s)  10/02/09 09/26/09 09/19/09 Y/Y 2008 2007 2006 
Initial Claims 521 554 534 9.0% 420 321 313
Continuing Claims -- 6,040 6,112 63.2% 3,342 2,552 2,459
Insured Unemployment Rate (%) -- 4.5 4.6 2.8 (09/2008) 2.5 1.9 1.9
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