Global| Jan 24 2008Low U.S. Initial Claims for Jobless Insurance: Doubts About Hiring Slowdown
by:Tom Moeller
|in:Economy in Brief
Summary
Initial claims for jobless insurance remained unexpectedly low last week. A 1,000 w/w decline followed sharp declines during the prior three weeks which now have totaled 15.7% since the high one month ago. The latest level was the [...]
Initial claims for jobless insurance remained unexpectedly low last week. A 1,000 w/w decline followed sharp declines during the prior three weeks which now have totaled 15.7% since the high one month ago. The latest level was the lowest since September.
Initially, this drop in claims was doubted as genuine due to the difficulties of seasonal adjustment during the Holiday season. Those difficulties suggested that claims would bounce up last week. Indeed, a rise to 320,000 had been the Consensus expectation. No special factors were sighted by the Labor Department as having influenced last week's figure.
The four week moving average of initial claims, a measure which smoothes out most of the series' w/w volatility, fell sharply to 314,750 (+0.7% y/y). It was the lowest level since mid-October and may suggest that recent labor market weakening was not as great as earlier perceived. But in a wishy-washy spirit, the perception should not be wholly dismissed based on the new figures. 
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last six years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.
Continuing claims for unemployment insurance dropped 75,000. It reversed a 59,000 increase during the prior week which was revised down slightly. The figure provides some indication of workers' ability to find employment but here again difficulties of seasonal adjustment this time of year are great.
The continuing claims numbers lag the initial claims figures by one week.
The insured rate of unemployment fell back to 2.0% from 2.1% during the prior week.
Monetary Policy Implementation Frameworks: A Comparative Analysis from the Federal Reserve Bank of New York is available here.
| Unemployment Insurance (000s) | 01/19/08 | 01/12/07 | Y/Y | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Initial Claims | 301 | 322 | 4.9% | 313 | 331 | 343 |
| Continuing Claims | -- | 2,751 | 11.3% | 2,459 | 2,662 | 2,924 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
