• State initial claims jump may reflect holiday distortions.

• Continuing claims also jump.

• Insured jobless rate hits four-week high.

Initial claims for unemployment insurance increased in the week ended January 9 to 965,000 from 784,000 the prior week, revised from 787,000. Initial claims for December 26 were revised to 782,000 from 797,000. The Action Economics Forecast Survey participants estimated 800,000 initial claims.

A change in the calculation of seasonal adjustment factors created a break in the series in late August. Though the current comparison to early September is valid, comparisons with figures before August 22 are not. Haver Analytics has calculated methodologically-consistent seasonally adjusted claims dating back to 1979. This series matches the Department of Labor seasonally adjusted series since the change in methodology. For more details, please see the September 3 commentary on jobless claims.

Initial claims for the federal Pandemic Unemployment Assistance (PUA) program, which covers individuals such as the self-employed who are not included in regular state unemployment insurance, jumped w/w to 284,470 from 161,159, still below the December 26 level of 310,462 . Note that the brief history of this program, starting on April 4, 2020, means these data and other COVID-related series are not seasonally adjusted. Currently, this may simply mean that the decline in PUA initial claims is due to the Christmas holiday.

Continuing claims for regular state unemployment insurance surged to 5.271 million in the week ended January 2 from 5.072 million the week before. It was the highest level in three weeks. Continuing PUA claims, which are lagged an additional week and not seasonally adjusted, declined 7.443 million, the lowest level since early May. The Pandemic Emergency Unemployment Compensation (PEUC) claims also decreased in the December 26 week to 4.166 million. This program covers people who were unemployed before COVID but exhausted their state benefits and are now eligible to receive benefits through March 11, 2021. Funding for both PUA and PEUC programs was recently renewed.

These data do not include the federal pandemic assistance programs. If you include the latest data available, the total number of state, PUA and PEUC continuing claims decreased in the December 25 week to 18.406 million, the lowest level since April.

The seasonally adjusted state insured rate of unemployment rose to 3.7% in the week ended January 2, a four week high. The state insured rates of unemployment – which do not include the special federal programs – continued to show wide variation. In the week ended December 25, Utah had the lowest rate at 1.06% and Pennsylvania posted the highest at 6.62%. The larger states ranged between 1.48% for Florida and 5.02% for California. New York was 4.27% and Illinois 5.58%. These state rates are not seasonally adjusted.

Data on weekly unemployment claims going back to 1967 are contained in Haver's WEEKLY database, and they are summarized monthly in USECON. Data for individual states are in REGIONW. The expectations figure is from the Action Economics Forecast Survey, carried in the AS1REPNA database.

The Federal Reserve's New Framework: Context and Consequences from Fed Vice Chair Richard H. Clarida is available here.