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Economy in Brief

U.S. Weekly Initial Claims for Jobless Insurance Jump
by Tom Moeller July 22, 2010

An earlier sign of job market improvement was fleeting. That's the message from the report that initial claims for jobless insurance jumped to 464,000 and more-than-reversed the prior week's decline. The earlier week's figure was 427,000, initially reported at 429,000. The latest level was higher than Consensus expectations for 445,000 claims. The four-week moving average of initial claims rose to 456,000. These figures are down from the recession peak of 651,000 reached in March of 2009.

The latest figure covers the survey week for July nonfarm payrolls and claims fell 12,000 (2.5%) from survey week in June. During the last ten years there has been a 78% correlation between the level of claims an the m/m change in employment.

Continuing claims for unemployment insurance during the latest week fell to 4.487M and was off 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. The four-week average of continuing claims rose slightly off the cycle low to 4.581M. This series dates back to 1966. 

Ongoing claims do not reflect those who receive extended benefits. Extended benefits for unemployment insurance rose to 445,394 and more-than-reversed the prior week's decline. These figures do not include the diminished 3,483,940 benefit recipients (+28.7% y/y) under state administered "EUC" emergency programs, but paid for by the Federal government.

The insured unemployment rate fell to 3.5% from an unrevised 3.7% during the prior week. It 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 July 3 were in Puerto Rico (7.0 %), Oregon (4.9), Pennsylvania (4.8), Alaska (4.5), Nevada (4.5), Connecticut (4.4), Massachusetts (4.4), New Jersey (4.4), California (4.1), and Wisconsin (4.1). The lowest insured unemployment rates were in Virginia (1.8), Wyoming (2.1), Texas (2.3), Maine (2.6), Tennessee (2.7), Georgia (3.1), Maryland (3.1), Ohio (3.4), Florida (3.5), New York (3.6) and Massachusetts (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.

Do labor market activities help predict inflation? from the Federal Reserve Bank of Chicago can be found here.

Unemployment Insurance (000s) 07/17/10 07/10/10 07/03/10 Y/Y 2009 2008 2007
Initial Claims 464 427 458 -17.7% 572 419 321
Continuing Claims -- 4,487 4,710 -26.7 5,809 3,340 2,549
Insured Unemployment Rate (%) -- 3.5 3.7 4.6 (7/2009) 4.4 2.5 1.9
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