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Economy in Brief

U.S. Initial Jobless Insurance Claims Rise Disappoints
by Tom Moeller June 17, 2010

Following three weeks of ease, the rise in initial unemployment insurance claims last week disappointed Consensus expectations for another decline. The Bureau of Labor Statistics reported that initial claims for jobless insurance rose 12,000 to 472,000 following a 1,000 uptick during the prior week. The latest level was the highest in four weeks and Consensus expectations were for 450,000 claims. Nevertheless, 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 was roughly unchanged at 463,500.

Claims during the latest week cover the survey period for June nonfarm payrolls. They  slipped 2,000 (-0.4%) from the May period. During the last ten years there has been an inverse 77% correlation between the level of claims and the m/m change in nonfarm payrolls.

Continuing claims for unemployment insurance during the latest week rose 88,000 and recovered a third of the prior week's decline. Nevertheless, claims remained near the lowest since December of 2008. 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 4.601M reached a new cycle low. This series dates back to 1966. 

Ongoing claims do not reflect those who receive extended benefits. Extended benefits for unemployment insurance rose sharply in the latest week to 416,513 and it was the highest level since November. These figures do not include the 4,804,030 benefit recipients under state administered "EUC" emergency programs, but paid for by the Federal government.

The insured unemployment rate ticked up to 3.6%. It 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 week ending May 29 were in Puerto Rico (6.2%), Alaska (5.5), Oregon (5.2), Nevada (4.6), Pennsylvania (4.4), North Carolina (4.2), Wisconsin (4.1), California (4.0), Connecticut (4.0), and New Jersey (3.9). The lowest insured unemployment rates were in Virginia (1.8), Texas (2.1), Wyoming (2.4), Tennessee (2.5), Maryland (2.8), Georgia (2.9), Ohio (2.9), Maine (2.8) Florida (3.0) and New York (3.2). 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) 06/12/10 06/05/10 05/29/10 Y/Y 2009 2008 2007
Initial Claims 472 460 459 -21.9% 572 419 321
Continuing Claims -- 4,571 4,483 -29.6 5,809 3,340 2,549
Insured Unemployment Rate (%)   3.6 3.5 4.9(6/2009) 4.4 2.5 1.9
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