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Economy in Brief

U.S. Initial Unemployment Insurance Claims Increase
by Tom Moeller April 8, 2010

Earlier improvement in the labor market paused last week, according to the Bureau of Labor Statistics. Initial claims for jobless insurance rose 18,000 to 460,000, the highest level in five weeks. The increase followed a 3,000 decline during the prior week which was half that reported initially. Nevertheless, the latest level is down from the recession peak of 651,000 reached in March of 2009. Last week's level exceeded Consensus expectations for 435,000 new claims but the four-week moving average of initial claims rose just slightly to 450,250.

Continuing claims for unemployment insurance during the latest week fell to a new cycle low and are down by one-third since the late-June peak. 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 also fell to a cycle low of 4.648 mil. This series dates back to 1966.

Extended benefits for unemployment insurance rose by more-than-one half w/w to 214,393. Nevertheless, 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 while in California an additional 79 weeks are available.

The insured unemployment rate slipped to 3.5% after five weeks at 3.6%. 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 19 were in Alaska (7.1% percent), Oregon (6.0), Wisconsin (5.7), Pennsylvania (5.4), Michigan (5.4), Nevada (5.3), North Carolina (5.0) and Connecticut (5.0). The lowest insured unemployment rates were in Virginia (2.0), Texas (2.3), Georgia (3.0), Florida (3.2), Wyoming (3.4), Maryland (3.4), Ohio (3.5), New York (3.9) and Maine (4.2). 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) 04/02/10 03/26/10 03/19/10 Y/Y 2009 2008 2007
Initial Claims 460 442 445 -28.5% 572 419 321
Continuing Claims -- 4,550 4,681 -22.1% 5,809 3,340 2,549
Insured Unemployment Rate (%) -- 3.5 3.6 4.6 (4/2009) 4.4 2.5 1.9
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