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Thursday, March 14, 2013

Weekly Unemployment Claims REALLY Down

We have a trend...  Unemployment claims have declined four out of the last five weeks. 

First time unemployment jobless claims decreased to 332,000  for the week ending March 2nd.   This is a decrease of 10,000 but, more important, it appears to mark a solid trend of weekly first time initial claims below 350,000.  It also shows that so far employers are NOT laying people off in response to the sequester; however, as was mentioned last week, the effects of the sequester on employment may occur farther down the road.

The four-week moving average # of claims decreased by 
7,000 after decreasing by 6,750 last week.  First time claims continue at about the same level that they were in late 2007 to early 2008.  

(Even though these numbers are seasonally adjusted, weekly claims numbers are always a bit volatile and should  only be analyzed in terms of a trend over a period of weeks.  See the graph below.) 

For the week ending February 23rd, 5,619,860 people were receiving unemployment benefits under one of the programs that are available (regular state, federal extended unemployment compensation, or a few other smaller programs).  This was an increase of 217,967 continuing claims since the previous week.  The increase in continuing claims occurred in both the Regular State Claims and the Federal Extended Unemployment Benefits program (the "Tiers").

Percent of Unemployed People Receiving Benefits increased to about 45% for the week ending February 23rd.

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:  2012-13) and the past three years (blue:  2009-10green:  2010-11 and black:  2011-12) are marked in different colors.  You can see that, as a trend, first time claims for unemployment have declined from one year to the next, even though there are variations within the year.  You can also see the impact of Hurricane Sandy on claims in November 2012.  Though the number of initial unemployment claims has been variable over the past three months, it has continued a downward trajectory.  

Be aware that:
  1. The graph above shows first time claims, so people who have continued to receive benefits or who have lost unemployment benefits are not 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.

First time unemployment claims decreased by 10,000 over those reported last week.  Last week's initial claims numbers were revised upwards by  2,000.  There are usually slight upwards revisions  (1,000 to 3,000) in the numbers of initial claims in most of the weeks of the past several months.  (The chart above shows REVISED claims numbers.)

As usual, to put this into perspective, check out the red line on the chart above to see where jobless claims are now, in late 2012/early 2013, compared to the past three years.

From the current report:
In the week ending March 9, the advance figure for seasonally adjusted initial claims was 332,000, a decrease of 10,000 from the previous week's revised figure of 342,000. The 4-week moving average was 346,750, a decrease of 2,750 from the previous week's revised average of 349,500.

The initial claims as announced last week were 340,000, so the claims from that week were revised upwards by 2,000. 

Current January/February/March Initial Claims Continue to be the Lowest Since Late 2007/Early 2008.

As a whole, the current numbers of initial claims continue to be the lowest Winter initial claims numbers since late 2007/early 2008.

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, declined 89,000 for the week ending March 2nd after increasing 3,000 the week before.  3,024,000 people filed continuing regular state claims in the week ending March 2nd.  As a whole, continuing regular claims continue to decline despite some individual weekly increases.  (There were 3,394,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance is 45% of the officially unemployed for the week ending February 23rd.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending February 23rd, 5,619,860 people were 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 in unadjusted numbers according to the monthly February unemployment situation report which was released Friday, March 8th.  Those numbers, showing that only 45% of 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.  (This ratio and these two numbers are NOT seasonally adjusted.)

Extended Benefits (EB) Only Available in Alaska

Extended Benefits claims were only available in Alaska during the week ending February 23rd.  

As of the week ending February 23rd, only 549 people were still receiving Extended Benefits, as mentioned above.  As recently as late April 2012, 350,579 people were receiving Extended Benefits.  A year ago, 453,300 people were receiving Extended Benefits.

Therefore, over the last ten months, 99.8% of the people who were receiving Extended Benefits are no longer receiving such benefits.  We do not know how many of these 350,000 people found jobs, how many have another source of income in the family, and how many have nothing. 

To reiterate, 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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