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Economy in Brief

U.S. Initial Jobless Insurance Claims Slip
by Tom Moeller May 27, 2010

The labor market's improvement continues. That's the message from the Bureau of Labor Statistics report that initial claims for jobless insurance slipped 14,000 to 460,000 following last week's upwardly revised 28,000 increase. The latest disappointed Consensus expectations for a decline to 455,000 claims but claims remained near this cycle's lowest. Last week's figure was down from the recession peak of 651,000 reached in March of 2009. The four-week moving average of initial claims ticked up to 456,500.

A 49,000 decline in continuing claims for unemployment insurance during the latest week followed the prior week's 3,000 decline, which was less than reported initially. Claims were near the cycle low and down by one-third from the June '09 peak. 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 at 4.637M remained near the cycle low. This series dates back to 1966.

Extended benefits for unemployment insurance rose further w/w to 278,953. However, they were down by roughly one-half from a peak of 597,688 reached in November.

The insured unemployment rate remained at 3.6% where it has been since mid-February. The rate reached a high of 4.9% during May of 2009. During the last ten years, there has been a 96% 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 May 8 were in Puerto Rico (6.2 percent), Alaska (5.9), Oregon (5.4), Nevada (4.9), California (4.8), Pennsylvania (4.7), Wisconsin (4.5), North Carolina (4.4), Montana (4.3), and Connecticut (4.2). The lowest insured unemployment rates were in Virginia (1.8), Texas (2.1), Tennessee (2.6), Wyoming (2.7), Georgia (2.8), Maryland (2.9), Florida (3.0), Ohio (3.0), New York (3.3) and Maine (3.2). 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.

Distortionary Fiscal Policy and Monetary Policy Goals from the Federal Reserve Bank of Kansas City is available here.

Unemployment Insurance (000s) 05/22/10 05/15/10 05/08/10 Y/Y 2009 2008 2007
Initial Claims 460 472 446 -24.7% 572 419 321
Continuing Claims -- 4,607 4,656 -29.1 5,809 3,340 2,549
Insured Unemployment Rate (%) -- 3.6 3.6 4.9 (5/2009) 4.4 2.5 1.9
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