U.S. Initial Jobless Insurance Claims Edge Up To Highest in Four Weeks

Earlier improvement in the labor market improvement stalled in June. Initial claims for unemployment insurance edged up last week by 15,000 to 627,000, their highest level since May. The latest increase followed a modest 7,000 rise during the prior week. Despite these gains, however, initial claims were down from their March peak of 674,000. In addition, the four-week average of claims, which smoothes out some of the volatility in the weekly numbers, fell slightly to 617,250 which was its lowest level since since mid-February. The latest weekly level by far exceeded the Consensus expectation for 601,000 claims.

The Labor Department indicated that the largest increases in initial claims for the week ending June 13 were in Florida (+8,383), Pennsylvania (+3,191), Missouri (+2,874), Puerto Rico (+2,561), and California (+2,540), while the largest decreases were in Michigan (-5,414), New York (-5,299), North Carolina (-4,714), Tennessee (-4,414), and Ohio (-3,802).

Though continuing claims for unemployment inched up in the latest week, modest improvement in the job market still is evident in the figures. Claims rose a slight 29,000 following a sharp 126,000 decline from their high during the prior week. Continuing claims provide an indication of workers' ability to find employment. At 6,738,000, however, claims remained more than twice the year ago level. Further suggesting that the job market's improvement is just modest was that the four-week average of continuing claims fell just slightly from their record high. The series dates back to 1966.

Also indicating marginal labor market improvement was the insured unemployment rate, which held at 5.0% versus the cycle high of 5.1%. The level remained more than double that of June 2008 and the highest since 1983. During the last ten years there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics.

Clearly, the latest weekly figure understates labor market distress in some states.The highest insured unemployment rates in the week ending June 6 were in Michigan (7.0 percent), Oregon (6.8), Puerto Rico (6.7), Nevada (6.3), Pennsylvania (6.2), Wisconsin (5.7), California (5.4), Arkansas (5.3), Illinois (5.3), and North Carolina (5.3).

The unemployment insurance claims data is available in Haver's WEEKLY database and the state data is in the REGIONW database.