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Economy in Brief

U.S. Initial Jobless Insurance Claims Slip 
by Tom Moeller  June 2, 2011 

Initial claims for jobless insurance slipped last week to 422,000 from 428,000 during the week earlier, revised from 424,000. The latest figure was slightly higher than Consensus expectations for 419,000 claims. The four-week moving average of claims fell to 425,500. 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 slipped to 3.711M and the insured unemployment rate held at 3.0% where it's been since late-February. 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, fell to 625,675 during the week ending May 14 (the latest figure available). A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, also saw a 3.415M beneficiaries (-31.7% y/y) in the May 14th 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 "work share" programs. All together, during the May 14th week, these recipients fell to 7.683M, off 22.3% y/y. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. The latest rate held at 5.0%. 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 early-2009. 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.

How much of the decline in unemployment is due to the exhaustion of unemployment benefits? from the Federal Reserve Bank of Chicago can be found here.

Unemployment Insurance (000s) 5/28/11 5/21/11 5/14/11 Y/Y % 2010 2009 2008
Initial Claims 422 428 414 -9.1 459 574 418
Continuing Claims -- 3,711 3,712 -20.8 4,544 5,807 3,338
Insured Unemployment Rate(%) -- 3.0 3.0 3.6
3.6 4.4 2.5
Total "All Programs" (NSA)* -- 7.683M -22.3 9.850M 9.163M 3.903M

*Excludes disaster unemployment assistance and trade readjustment allowance
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