U.S. Initial Jobless Insurance Claims Reverse Three-Week Increase

Earlier suggestions of labor market deterioration were reversed by today's Labor Department report that initial claims. Jobless insurance fell 43,000 to the lowest level since early-January. Last week's decline to 440,000 followed an upwardly revised increase to 483,000 during the prior week and claims remained near the lowest level since late-August, 2008. Initial claims were down from the recession peak of 674,000 hit last March. Consensus expectations had been for a lesser decline to 465,000 claims. The four-week moving average of initial claims fell slightly to 468,500 and remained near the cycle low. 

Continuing claims for unemployment insurance during the latest week also declined to a new cycle low and left claims down by one-third since late-June. Continuing claims are at the lowest level since early-January of last year. The overall decline is a function of the improved job market but also reflects the exhaustion of 26 weeks of unemployment benefits. Continuing claims provide an indication of workers' ability to find employment. The four-week average of continuing claims fell to a cycle low of 4,603,500. This series dates back to 1966. 

 Extended benefits for unemployment insurance rose moderately to 236,041 from its cycle low during the fourth week of January and were down by two-thirds from a peak of 597,688 reached in November. 

The insured rate of unemployment remained stable at a low of 3.5%. The rate reached a high of 5.2% during late-June. 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. 

The highest insured unemployment rates in the week ending January 15 were in Alaska (7.5%), Wisconsin (6.4), Pennsylvania (6.2), Montana (6.2), Michigan (5.8), North Carolina (5.4), Washington (5.3) and Connecticut (5.3). The lowest insured unemployment rates were in Virginia (2.3), Texas (2.5), Florida (3.4), Maryland (3.6), Wyoming (3.7), Mississippi (3.8), Ohio (3.9), Indiana (4.0), New York (4.1) and Maine (4.4). These data are not seasonally adjusted but the overall insured unemployment rate is.

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

Productivity, Welfare, and Reallocation: Theory and Firm‐Level Evidence from the Federal Reserve Bank of New England can be found here.