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Economy in Brief

U.S. Initial Claims For Jobless Insurance Fall To Lowest Since 2008
by Tom Moeller  February 10, 2011

Initial claims for unemployment insurance fell sharply last week to 383,000, the lowest level since October 2008. The prior week's level was revised up slightly to 419,000 from 415,000. The decline was greater than expectations for 410,000 claims. The figure may reflect a correction from earlier, higher levels that were boosted by January's severe winter weather, just as the payroll employment figures were pushed lower. During the last ten years there has been a 77% correlation between the level of claims and the m/m change in nonfarm payrolls.

Continuing claims for unemployment insurance also fell sharply. The decline to 3.888 million followed another drop the week earlier and the insured unemployment rate held at a reduced 3.1%. These claimants, however, were only about half of the total number of people currently receiving unemployment insurance. Regular extended benefits, with eligibility dependent on conditions in individual states, increased to 878,674 during week ending January 22 (the latest figure available). A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, saw 3.757M beneficiaries in the January 22 week.

A grand total of all claimants for unemployment insurance includes extended and emergency programs and specialized programs covering recently discharged veterans, federal employees and those in state-run "workshare" programs. All together, on January 15, the total number of all these recipients rose to 9.406M, off 18.5% y/y, but the latest level was nearly the highest since August. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. That rate was just over 6% in January. It peaked at 9.3% on January 2, 2010.

Two other programs, disaster unemployment assistance (DUA) and trade readjustment allowance (TRA), are reported through a different Labor Department channel. Claimants were the lowest since June in late December. All of these individual program data are not seasonally adjusted.

Data on weekly unemployment insurance programs are contained in Haver's WEEKLY database, including the seasonal factor series, and they are summarized monthly in USECON. Data for individual states, including the unemployment rates that determine individual state eligibility for the extended benefits programs and specific "tiers" of the emergency program, are in REGIONW, a database of weekly data for states and various regional divisions. 

Economic Effects of the Unemployment Insurance Benefit from the Federal Reserve Bank of Philadelphia can be found here.

Unemployment Insurance (000s) 2/5/11 1/29/11 1/22/11 Y/Y % 2010 2009 2008
Initial Claims 383 419 457 -12.8 457 572 419
Continuing Claims -- 3,888 3,935 -18.9 4,545 5,809 3,340
Insured Unemployment Rate(%) -- 3.1 3.1 3.7
(2/10)
3.6 4.4 2.5
Total "All Programs" (NSA)* -- -- 9.406M -18.5% 9.850M 9.163M 3.903M

*Excludes disaster unemployment assistance and trade readjustment allowance
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