Global| Jul 31 2008U.S. Initial Claims for Jobless Insurance Surged Again
by:Tom Moeller
|in:Economy in Brief
Summary
Initial claims for unemployment insurance surged last week to 448,000 from 404,000 during the prior week. The latest level was the highest in five years but it may have been upwardly biased by summer workers. The weekly level [...]
Initial claims for unemployment insurance surged last week to 448,000 from 404,000 during the prior week. The latest level was the highest in five years but it may have been upwardly biased by summer workers. The weekly level surpassed Consensus expectations for 390,000 claims.
As a result of the latest jump in initial claims, the four-week moving average increased to 393,000 (27.4% y/y). During June claims averaged 391,000.
A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last ten years there has been a (negative) 76% correlation between the level of initial claims and the m/m change in nonfarm payroll employment. Over the longer period of time, the level of claims for jobless insurance has not trended higher with the size of the labor force due to a higher proportion of self-employed workers who are not eligible for benefits.
Continuing claims for unemployment insurance during the latest week jumped 185,000 after declines during the prior two weeks. The four-week moving average of continuing claims rose and reached the highest level since early 2004.
Continuing claims provide some indication of workers' ability to find employment and they lag the initial claims figures by one week.
The insured rate of unemployment rose to 2.5% from 2.3%. The latest was the highest level since early 2004.
| Unemployment Insurance (000s) | 07/26/08 | 07/19/08 | Y/Y | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Initial Claims | 448 | 404 | 43.1% | 322 | 313 | 331 |
| Continuing Claims | -- | 3,282 | 29.1% | 2,552 | 2,459 | 2,662 |
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.
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