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Economy in Brief

U.S. Initial Jobless Insurance Claims Rise Unexpectedly
by Tom Moeller May 20, 2010

For last week, the Bureau of Labor Statistics reported that initial claims for jobless insurance rose 25,000 to 471,000 following declines during the prior five weeks. The latest disappointed Consensus expectations for 440,000 claims. Even the earlier week's level was revised up modestly. Still, claims remained near this cycle's lowest. Last week's figure was down from the recession peak of 651,000 reached in March of 2009. The four-week moving average of initial claims increased slightly to 453,500.

The latest claims figure covers the survey week for May nonfarm payrolls. Claims fell 7,500 (-1.6%) from the April survey period. During the last ten years there has been an 80% correlation (inverse) between the level of initial claims and the m/m change in nonfarm payrolls.

A 40,000 decline in continuing claims for unemployment insurance during the latest week reversed the prior week's increase. Claims were down by one-third from the June '09 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 at 4.643M remained near the cycle low. This series dates back to 1966.

Extended benefits for unemployment insurance rose w/w to 240,260. However, they were down by three-quarters from a peak of 597,688 reached in November.

The insured unemployment rate remained at 3.6% where it has been since mid-February. The rate reached a high of 4.9% during May of 2009. 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 May 1 were in Alaska (6.4%), Puerto Rico (6.0), Oregon (5.6), Nevada (5.0), California (4.9), Pennsylvania (4.6), Wisconsin (4.6), Montana (4.5), Idaho (4.4), North Carolina (4.4), and Washington (4.4). The lowest insured unemployment rates were in Virginia (1.7), Texas (2.2), Georgia (2.8), Maryland (2.9), Wyoming (3.0), Florida (3.1), Ohio (3.1), New York (3.3) and Maine (3.4). 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.

The impact of low-skilled immigration on the youth labor market from the Board of Governors can be found here here.

Unemployment Insurance (000s) 05/15/10 05/08/10 05/01/10 Y/Y 2009 2008 2007
Initial Claims 471 446 446 -24.6% 572 419 321
Continuing Claims -- 4,625 4,665 -28.3 5,809 3,340 2,549
Insured Unemployment Rate (%) -- 3.6 3.6 4.9 (5/2009) 4.4 2.5 1.9
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