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Economy in Brief

U.S. Initial Unemployment Insurance Claims Are Lowest Since April
by Tom Moeller  July 28, 2011

In a sign of labor market healing, initial unemployment insurance claims fell last week to 398,000 versus a revised 422,000 during the week prior, initially reported as 418,000. The latest figure was the lowest since the first week of April. Consensus expectations had been for 415,000 initial claims for last week. The four-week moving average fell to 413,750. 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 fell to 3.703M, the lowest since early last month. The insured unemployment rate slipped to 2.9% from an upwardly revised 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 587,685 (38.0% y/y) during the week ending July 9 (the latest figure available). A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, saw 3.172M beneficiaries (-3.4% y/y) in the July 9th 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 9th week, these recipients rose to 7.646M, down 8.9% y/y. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. The latest rate rose w/w to 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. Claims 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.

The Fed's latest Beige Book covering regional economic conditions can be found here here.

Unemployment Insurance (000s) 7/23/11 7/16/11 7/9/11 Y/Y % 2010 2009 2008
Initial Claims 398 422 408 -12.9 459 574 418
Continuing Claims -- 3,703 3,720 -18.3 4,544 5,807 3,338
Insured Unemployment Rate(%) -- 2.9 3.0 3.6
(7/10)
3.6 4.4 2.5
Total "All Programs" (NSA) -- -- 7.646M -8.9 9.850M 9.163M 3.903M
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