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Economy in Brief

U.S. Unemployment Claims Fell but Remain on Uptrend
by Sandy Batten  July 28, 2022

• Initial claims decreased 5,000 to 256,000 in the July 23 week.

• But previous week was revised up 10,000.

• Continued claims fell 25,000 in the week of July 16.

• The insured unemployment rate was unchanged at 1.0%.

Initial claims for unemployment insurance filed in the week ended July 23 fell 5,000 to 256,000 (-37.7% y/y) but the 251,000 figure initially reported for the previous week was revised up to 261,000. The Action Economics Forecast Survey had expected 247,000. The recent low for claims was 166,000 in the week of March 19. The four-week moving average of initial claims rose to 249,250 from 243,000 in the previous week (revised up from 240,500). This is the highest four-week average since last November 2021.

The behavior of initial claims has been a rather dependable leading indicator of the business cycle. So, even though the level of claims remains historically quite low, the uptrend since mid-March could be a harbinger of increasing recession risks. Indeed, in a separate release this morning, U.S. real GDP unexpectedly fell in Q2, the second consecutive quarterly decline.

In the week ended July 16, continued weeks claimed for unemployment insurance fell 25,000 to 1.359 million from 1.384 million in the prior week, which was not revised. The insured unemployment rate was unchanged at 1.0%. The insured unemployment rate has been fluctuating between 0.9% and 1.0% since April (a record-low range).

In the week ended July 9, the total number of continued weeks claimed in all unemployment insurance programs rose 123,430 to 1.476 million from 1.353 million. A 36-year low of 1.282 million was reached in the week of May 28. This total includes federal employees, newly discharged veterans, extended benefits and other specialized programs and is not seasonally adjusted. Claims in the Pandemic Unemployment Assistance program and Pandemic Emergency Unemployment Compensation are no longer included in the main Labor Department press release, as both programs have expired.

The insured rates of unemployment in regular programs across states vary widely. The highest insured unemployment rates in the week ending July 9 were in New Jersey (2.10%), California (1.91%), Rhode Island (1.85%), New York (1.62%) and Pennsylvania (1.57%). The lowest rates were in South Dakota (0.19%), Virginia (0.29%), Kansas (0.31%) and Nebraska (0.36%). Other state insured rates of unemployment in regular programs include Illinois (1.18%), Texas (0.87%), Ohio (0.75%) and Florida (0.45%). 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.

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