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Economy in Brief

U.S. Initial Unemployment Insurance Claims Fall
by Tom Moeller  April 21, 2011

Initial claims for jobless insurance fell last week to 403,000 from 416,00 during the week prior, initially reported as 412,000. The latest figure exceeded Consensus expectations for 395,000 claims and remained near the highest in eight weeks. The four-week moving average of claims rose slightly to 399,000. During the last ten years there has been a 77% correlation between the level of claims and the m/m change in nonfarm payrolls.

The latest figure is for the survey week covering April nonfarm payrolls and claims rose 10,500 (2.7%) from the March period. During the last ten years there has been a 75% correlation between the level of claims and the m/m change in payroll employment.

Continuing claims for unemployment insurance slipped to a cycle low of 3.695M. The insured unemployment rate remained at its low of 2.9%. These claimants, however, were only about half of the total number of people currently receiving unemployment insurance. Regular extended benefits, with eligibility dependent on conditions in individual states, fell to 7.139M during the week ending April 2 (the latest figure available). A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, saw a reduced 3.527M beneficiaries (-34.0% y/y) in the April 2nd week.

A grand total of all claimants for unemployment insurance includes extended and emergency programs and specialized programs covering recently discharged veterans, federal employees and those in state-run "work share" programs. All together, during the April 2nd week, the total number of these recipients fell to 8.300M, off 22.0% y/y. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. The latest rate fell to 5.4%. It peaked at 9.3% on January 2, 2010.

Two other programs, disaster unemployment assistance (DUA) and trade readjustment allowance (TRA), are reported through a different Labor Department channel. Claimants were the lowest since June in late December. All of these individual program data are not seasonally adjusted.

Data on weekly unemployment insurance programs are contained in Haver's WEEKLY database, including the seasonal factor series, and they are summarized monthly in USECON. Data for individual states, including the unemployment rates that determine individual state eligibility for the extended benefits programs and specific "tiers" of the emergency program, are in REGIONW, a database of weekly data for states and various regional divisions. Action Economics estimates are in AS1REPNA.

Yesterday's statement on financial literacy by Fed Chairman Ben S. Bernanke can be found here.

Unemployment Insurance (000s) 4/16/11 4/9/11 4/2/11 Y/Y % 2010 2009 2008
Initial Claims 403 416 385 -14.1 459 574 418
Continuing Claims -- 3,695 3,702 -21.2 4,544 5,807 3,338
Insured Unemployment Rate(%) -- 2.9 2.9 3.6
3.6 4.4 2.5
Total "All Programs" (NSA)* -- -- 8,300 -22.0 9.850M 9.163M 3.903M

*Excludes disaster unemployment assistance and trade readjustment allowance
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