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Thursday, May 24, 2012

Weekly Initial Jobless Claims Stable

First time unemployment claims stable... and the four-week moving average decreases!

First time unemployment claims were the same as reported last week, though the four-week moving average has decreased by 5,500.  Claims have been stable this spring, as seen on the attached chart.

Check out the red line on the chart below to see where jobless claims are now, in spring of 2012, compared to spring of the past two years.

From the current report:

In the week ending May 19, the advance figure for seasonally adjusted initial claims was 370,000, a decrease of 2,000 from the previous week's revised figure of 372,000. The 4-week moving average was 370,000, a decrease of 5,500 from the previous week's revised average of 375,500.
The initial claims as announced last week were 370,000, so the claims from that week were revised upwards by 2,000. 

The chart above is one of the BEST charts for understanding and observing changes in the weekly initial claims numbers over time.  This year (red-2012) and the past two years (green- 2011 and blue- 2010) are marked in different colors.  You can see that, as a trend, first time claims for unemployment have gone down SIGNIFICANTLY from one year to the next, even though there are variations within the year.  

Be aware that:  1.  These are first time claims, so people who have continued to receive benefits or who are losing any unemployment benefits would not be counted in these numbers.  2.  They are seasonally adjusted, so most variations caused by weather or holidays are already included in these numbers.  3.  As these are weekly numbers, they are more volatile than the monthly numbers.

You an also see that the April bulge, visible during the 1st-2nd week of April in all three years, has ended in 2012, with a return to first time claims levels of March.  As a comparison, the initial claims in April were around 260,000 in the year 2000, and about 300,000 in 2006 and 2007.  The current numbers of initial claims are the lowest springtime initial claims numbers since 2008.

The weekly report also tells us the number of people who are receiving unemployment benefits.  For the week ending May 5th, 6,168,620 people are receiving unemployment benefits under one of the programs that are available (regular state, extended benefits, federal extended unemployment compensation, or a few other smaller programs).  This compares with 12,500,000 people who are unemployed according to the monthly April unemployment situation report which was released last week.  Those numbers, showing that only half the officially unemployed are receiving benefits, should make it clear that people do NOT need to be receiving unemployment insurance to be counted among the unemployed.

Extended Benefits Expire

Many states have now "triggered" off of Extended Benefits.  Extended Benefits for those states, including California, Illinois, Florida, and several others, were due to end the weekend of May 12th.  On the current weekly report, as of the week of May 5th, 299,955 people are still receiving Extended Benefits.  However, within two weeks, we would expect to see the numbers of people receiving unemployment benefits in total and Extended Benefits in particular decline quite a bit due to the end of those benefits.  

So, while a decrease in the number of people filing for initial claims is a good thing and indicates that fewer people are being laid off, a decrease in the total number of people getting unemployment insurance may only show that fewer people are eligible for unemployment insurance benefits.

Any questions or confusion, please leave a comment or email me!

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