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Economy in Brief

U.S. Initial Claims For Insurance Slip Again
by Tom MoellerMarch 18, 2010

The rate of labor market improvement seems to have slowed. Initial claims for jobless insurance fell another 5,000 last week but it was only to 457,000 from a little revised 462,000 during the prior week. These levels are little changed from December. This flattening compares to earlier sharp declines from the recession peak of 674,000 hit twelve months ago. Claims remained near the lowest level since January 2009. The weekly decline about matched the Consensus expectation. The four-week moving average of initial claims inched up to 471,250.

Continuing claims for unemployment insurance during the latest week remained near the cycle-low and were down by one-third since late-June. The overall decline is a function of the improved job market but also reflects the exhaustion of 26 weeks of unemployment benefits. Continuing claims provide an indication of workers' ability to find employment. The four-week average of continuing claims held roughly steady at the cycle low of 4.579 mil. This series dates back to 1966.

Extended benefits for unemployment insurance dropped sharply to another cycle low of 155,592. They were down by two-thirds from a peak of 597,688 reached in November.Each state administers a separate unemployment insurance program within guidelines established by Federal law. Benefit amounts and the length of time benefits are received and determined by state law. For example, in Michigan and New York an additional 73 weeks of benefits are available and in California an additional 79 weeks are available.

The insured rate of unemployment held steady at 3.5% during the prior week. 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 February 21 were in Alaska (7.2% percent), Oregon (6.3), Pennsylvania (6.3), Wisconsin (6.1), Michigan (5.6), Nevada (5.6) and North Carolina (5.4). The lowest insured unemployment rates were in Virginia (2.3), Texas (2.4), Florida (3.3), Georgia (3.3), Mississippi (3.6), Wyoming (3.7), Maryland (3.7), Ohio (3.8), Indiana (3.9), New York (4.3) and Maine (4.6). These data are not seasonally adjusted but the overall insured unemployment rate is.

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

Unemployment Insurance (000s) 3/12/10 3/6/10 2/27/10 Y/Y 2009 2008 2007
Initial Claims 457 462 468 -29.0% 573 419 321
Continuing Claims -- 4,579 4,567 -15.8% 5,835 3,345 2,552
Insured Unemployment Rate (%) -- 3.5 3.5 4.3 (3/2009) 4.4 2.5 1.9
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