Global| Aug 25 2005Unemployment Insurance Claims Ease, Hover in Tight Range
Summary
Initial claims for unemployment insurance fell by 4,000 in the week ended August 20 to 315,000, partially reversing the prior week's revised 8,000 increase. This latest figure was right in line with Consensus expectations. The four- [...]
Initial claims for unemployment insurance fell by 4,000 in the week ended August 20 to 315,000, partially reversing the prior week's revised 8,000 increase. This latest figure was right in line with Consensus expectations.
The four-week moving average of initial claims rose to 315,000 (-6.7% y/y).
Continuing claims for unemployment insurance fell 9,000 in the August 13 week; the previous week's number was revised to a 22,000 increase from 28,000 reported initially.
The insured unemployment rate remained at its four-year low of 2.0% for a sixth consecutive week.
Initial claims are highly sensitive to the forces generating economic growth. Indeed, quarterly average claims have an 82% negative correlation with 4-quarter GDP growth. So in our chart, we have plotted weekly claims with those 4-quarter growth rates. We have used the "horizontal reference" feature of DLXVG3 to draw a line at 3.5%; the bar feature then points the individual bars up or down relative to that reference line instead of zero. There we see that turning points in claims appear to be roughly associated with shifts in growth above and below 3.5%. Four-quarter growth has been 3.6% throughout the first half of 2005 -- and initial unemployment insurance claims have hovered in a tight range of 315,000 to 330,000. The lower end of this range has held now since mid-July; this suggests good growth for Q3 as well -- or at least a firm foundation from which to meet the increasing burden of high energy costs.
| Unemployment Insurance (000s) | 08/20/05 | 08/13/05 | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Initial Claims | 315 | 319 | -7.9% | 343 | 402 | 404 |
| Continuing Claims | -- | 2,578 | -10.3% | 2,926 | 3,531 | 3,570 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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