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Economy in Brief

U.S. Initial Claims For Unemployment Insurance Pull Back
by Tom Moeller  March 17, 2011

Initial claims for unemployment insurance fell to 385,000 last week from 401,000, initially reported as 397,000. The decline roughly matched Consensus expectations according to Action Economics. Claims remained near the lowest since May 2008. The four-week moving average of claims fell to a new low of 386,250. During the last ten years there has been a 77% correlation between the level of claims and the m/m change in nonfarm payrolls.

The latest initial claims figure covers the survey period for March nonfarm payrolls. Claims were down 28,000 (-6.8%) from the February survey period. During the last ten yeas there has been a 77% correlation between the level of initial claims and the m/m change in nonfarm payrolls.

Continuing claims for unemployment insurance fell to a new low of 3.706M. The insured unemployment rate remained at 3.0%. 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, rose to 815,191 during the week ending February 26 (the latest figure available). A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, saw a reduced 3.542M beneficiaries (-39.8% y/y) in the February 26th 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, during the February 26th week, the total number of these recipients rose to 8.954M, off 23.6% y/y. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. The latest rate was 5.8%. 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. Action Economics estimates are in AS1REPNA.

The Effectiveness of Homeownership in Building Household Wealth from the Federal Reserve Bank of Kansas City can be found here.

Unemployment Insurance (000s) 3/12/11 3/5/11 2/26/11 Y/Y % 2010 2009 2008
Initial Claims 385 401 371 -15.2 457 572 419
Continuing Claims -- 3,706 3,786 -21.0 4,545 5,809 3,340
Insured Unemployment Rate(%) -- 3.0 3.0 3.6
(2/10)
3.6 4.4 2.5
Total "All Programs" (NSA)* -- -- 8.954M -23.6 9.850M 9.163M 3.903M

*Excludes disaster unemployment assistance and trade readjustment allowance
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