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Economy in Brief

U.S. Initial Claims for Jobless Insurance Retreated, but 2005 Revisited
by Tom Moeller January 3, 2008

Initial claims for jobless insurance fell 21,000 last week to 336,000 after a 9,000 rise during the prior week. During the week prior claims had risen a sharp 14,000, so the latest figure reversed nearly all of those two increases.

The four week moving average of initial claims, a measure which smoothes out most of the series' w/w volatility, fell slightly to 343,750 (7.5% y/y) and backpedaled from the highest level since 2005.

A claims level below 400,000 typically has been associated with growth in nonfarm payrolls. During the last six years there has been a (negative) 78% correlation between the level of initial claims and the m/m change in nonfarm payroll employment.

Continuing claims for unemployment insurance surged 46,000 after a 77,000 jump during the prior week. The gain lifted continuing claims to the highest level since 2005.

The continuing claims numbers lag the initial claims figures by one week.

The insured rate of unemployment rose to 2.1% after five weeks at 2.0%. the latest was the highest since 2005.

What Do Worker Flows Tell Us About Cyclical Fluctuations in Employment? from the Federal Reserve Bank of Philadelphia is available here.

Unemployment Insurance (000s)  12/29/07 12/22/07 Y/Y 2006  2005 2004
Initial Claims  336 357 3.1% 313 331 343
Continuing Claims -- 2,761 13.8% 2,459 2,662 2,924
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