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Economy in Brief

U.S. Initial Unemployment Insurance Claims Surge
by Tom Moeller  May 5, 2011

Initial claims for jobless insurance jumped last week to 474,000 from 431,000 during the prior period, initially reported as 429,000. By far, the latest figure exceeded Consensus expectations for 410,000 claims and was the highest since early-August. The four-week moving average of claims rose to 431,250. During the last ten years there has been a 77% correlation between the level of claims and the m/m change in nonfarm payrolls.

Continuing claims for unemployment insurance increased to 3.733M. The insured unemployment rate nudged up to 3.0%. 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 674,171 during the week ending April 16 (the latest figure available). A companion program, Emergency Unemployment Compensation, referred to as EUC 2008, saw a reduced 3.448M beneficiaries (-33.7% y/y) in the April 16th 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 16th week, these recipients fell to 8.015M, off 23.8% y/y. We calculate a broader insured unemployment rate by taking this grand total as a percent of covered employment. The latest rate slipped to 5.2%. 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.

Monetary Policy's Effect on Unemployment from the Federal Reserve Bank of St. Louis is available here.

Unemployment Insurance (000s) 4/30/11 4/23/11 4/16/11 Y/Y % 2010 2009 2008
Initial Claims 474 431 404 3.0 459 574 418
Continuing Claims -- 3,733 3,659 -19.7 4,544 5,807 3,338
Insured Unemployment Rate(%) -- 3.0 2.9 3.7
3.6 4.4 2.5
Total "All Programs" (NSA)* -- -- 8.015M -23.8 9.850M 9.163M 3.903M

*Excludes disaster unemployment assistance and trade readjustment allowance

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