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Economy in Brief

U.S. Initial Claims For Unemployment Insurance Stay Near Cycle Low
by Tom Moeller

If some economic data are known to be volatile, weekly data can be especially so, though telling. Last week initial claims for jobless insurance figure fell 14,000 to 442,000 from an unrevised 456,000. The rate of labor market improvement now looks to be regaining momentum after previously looking to have flattened. The latest figure is near the low for the economic recovery and is down from the recession peak of 651,000 hit twelve months ago. The weekly decline exceeded Consensus expectations for 450,000 and past data were revised due to updated seasonal factors. The four-week moving average of initial claims fell to a cycle-low 453,750.

Continuing claims for unemployment insurance during the latest week also fell to a cycle low and are 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 fell to a cycle low of 4.689 mil. This series dates back to 1966.

Extended benefits for unemployment insurance dropped sharply to another cycle low of 139,931. 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 are 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 an upwardly revised 3.6% during the prior week. The rate reached a high of 4.9% during May. During the last ten years, there has been a 96% 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 March 5 were in Alaska (7.2% percent), Oregon (6.2), Wisconsin (6.0), Pennsylvania (5.7), Michigan (5.6), Nevada (5.6), North Carolina (5.2) and Connecticut (5.1). The lowest insured unemployment rates were in Virginia (2.0), Texas (2.4), Georgia (3.1), Florida (3.2), Wyoming (3.6), Maryland (3.6), Ohio (3.7), New York (4.0) and Maine (4.5). 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.

Federal Reserve's exit strategy is this morning's House testimony by Fed Chairman Ben S. Bernanke and it can be found here.

Unemployment Insurance (000s) 3/19/10 3/12/10 3/5/10 Y/Y 2009 2008 2007
Initial Claims 442 456 451 -31.2% 572 419 321
Continuing Claims -- 4,648 4,702 -17.5% 5,809 3,340 2,549
Insured Unemployment Rate (%) -- 3.6 3.6 4.3 (3/2009) 4.4 2.5 1.9
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