U.S. Weekly Jobless InsuranceClaims Fall To Lowest Since January

The labor market signaled improvement again. Initial claims for unemployment insurance fell last week to the lowest level since early-January. The Labor Department indicated that claims fell to 521,000 from an upwardly revised 554,000 during the prior week. Both figures are down sharply from the peak reached in March of 674,000 claims. The latest decline contrasted with Consensus expectations for a smaller decline to 540,000 claims.· The largest decreases in initial claims during the week ending September 26 were in New York (-2,253, 14.1% y/y), North Carolina (-1,609, 26.0% y/y), South Carolina (-1,159, -7.8% y/y), Arkansas (-818, 39.6% y/y), and Florida (-734, 37.0% y/y). while the largest increases were in California (+4,467, 36.7% y/y), Ohio (+3,421, 30.2% y/y), Illinois (+1,815, 51.2% y/y), Missouri (+1,049, 43.0% y/y), and Tennessee (+1,048, 68.3% y/y).

Continuing claims for unemployment insurance during the latest week fell 72,000 to their lowest level since late-March. The decline continues to owe partially to the exhaustion of benefits. Continuing claims provide an indication of workers' ability to find employment. The four-week average of continuing claims fell modestly to 6,144,250. This series dates back to 1966.

Extended benefits for unemployment insurance rose sharply for the fourth consecutive week. Through mid-September extended benefits averaged 465,295. Congress is now debating who should qualify for another benefits extension. The House passed a bill last month lengthening benefits by 13 weeks for individuals in high-unemployment states.

The insured rate of unemployment slipped to 4.5% and matched its lowest since early-April 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 September 19 were in Puerto Rico (6.1 percent), Oregon (5.3), Nevada (5.2), Pennsylvania (5.0), California (4.9), Michigan (4.8), Wisconsin (4.7), Arkansas (4.6), North Carolina (4.6), and South Carolina (4.5). The lowest rates were in North Dakota (1.0%), South Dakota (1.1), Virginia (2.1), Wyoming (2.5), Maine (2.5), Texas (2.6), Colorado (3.0), Minnesota (3.1), Maryland (3.1), Mississippi (3.5), New York (3.5), Florida (3.9), and Georgia (3.9).· The unemployment insurance claims data is available in Haver's WEEKLY database and the state data is in the REGIONW database.

Was Monetary Policy Optimal During Past Deflation Scares? from the Federal Reserve Bank of Kansas City is available here.
 

The Bank of France monthly business survey continues to show a strong uptrend. The overall industry sentiment index (in red at the bottom of the table) scored a reading of 92 up from 89 in August, a standing of 30% in its range of values and above its average of 90 since October 1988. This is very good news, although the range standing is till quite low. There is along way to go to get to ‘normal’.

The production index has been flirting with positive values in three of the last five months so the move up to 0.59 from -0.77 is not so special this month. That reading compares with a 12-month average of minus 10 and a long term averages of +6. It stands in the 38th percentile of its range.

The production outlook index is up for the second time in three months rebounding from a reading of minus 1.36 in August to +1.23 in September. This reading, too, is better than its 12-month average of minus 7 and below its long terms average of +6. It stands in the 30th percentile of its range.

Demand is still quite negative and is assessed at a reading of -32. That is above the 12-month value of -37 but below the long term average of +1. Still it sits at a weak 16th percentile of its range. Foreign demand (orders) is barely better standing in the in the 19th percentile of its range.

New orders are faring better than the accumulated stock of orders (demand). The new order index fell by 2.62 points after two months of gains. Still the index stands in the 29th percentile of its range.

Job losses stepped up in the current month but the survey is on a definite improving trend. The jobs component for current hiring is in the 59th percentile of its range. For future hiring the index is the 52 percentile of its range and that indicator improved in the month.

In short French industry is still assessed at poor levels. But the improvement of the overall index is quite dramatic and the momentum for continued improvement is still in place. Optimism about France is not about being there but about getting there.