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Economy in Brief

U.S. Initial Claims for Jobless Insurance Rise
by Tom Moeller  July 21, 2011

Initial unemployment insurance claims rose last week to 418,000 versus a revised 408,000 during the week prior, initially reported as 405,000. The Labor Department indicated that the latest figure reflected 1,750 initial claims due to the government shutdown in Minnesota. Consensus expectations had been for 400,000 initial claims. The four-week moving average fell to 421,250. 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 claims figure covers the survey week for July nonfarm payrolls. Claims fell 11,000 (-2.6%) from the June period. During the last ten years there has been a 76% correlation between the level of claims and the m/m change in nonfarm payroll employment.

Continuing claims for unemployment insurance fell to 3.698M, the low end of the recent range. The insured unemployment rate slipped to 2.9%. 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 543,712 during the week ending July 2 (the latest figure available), the lowest level in nearly a year. A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, saw 3.154M beneficiaries (-10.1% y/y) in the July 2nd 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 July 2nd week, these recipients fell to 7.325M, down 13.5% y/y. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. The latest rate slipped to 4.8%. 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 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.

This morning's testimony by Fed Chairman Ben S. Bernanke can be found here here.

Are Underemployed Graduates Displacing Nongraduates? from the Federal Reserve Bank of Cleveland can be found here.

Unemployment Insurance (000s) 7/16/11 7/9/11 7/2/11 Y/Y % 2010 2009 2008
Initial Claims 418 408 427 -10.3 459 574 418
Continuing Claims -- 3,698 3,748 -17.5 4,544 5,807 3,338
Insured Unemployment Rate(%) -- 2.9 3.0 3.6
3.6 4.4 2.5
Total "All Programs" (NSA)* -- -- 7.325M -13.5 9.850M 9.163M 3.903M

*Excludes disaster unemployment assistance and trade readjustment allowance
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