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Thursday, May 2, 2013

Weekly Initial Unemployment Claims Drop Significantly


Weekly unemployment initial claims decreased by 18,000 this week after declining by 13,000 the week before.  This marks two weeks in a row of substantial decreases in the number of first-time unemployment claims.  


First time unemployment jobless claims decreased to 324,000  for the week ending April 27th.   This is a sizable decrease of 18,000 claims, and the smallest number of initial claims since the first weeks of 2008.  Since the beginning of the year, new weekly claims had remained in the range of 330,000 to 360,000 for eleven out of the past seventeen weeks, but this week's number of initial claims is below that range. 

The four-week moving average # of claims decreased by 
16,000 last week after decreasing by 3,750 the week before.  It is now 342,250.  This is the second big decrease in a row.  Initial claims are now at about the same level that they were five years ago, in late 2007 to early 2008.  


(Even though the weekly initial claims numbers are seasonally adjusted, these 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 April 13th, 4,963,449 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 a decrease of about 109,000 continuing claims since the previous week.  Most of the decrease was in the number of continuing claims in the Regular State program (the first 20 to 26 weeks of unemployment benefits), which decreased by 97,878.  Continuing claims in the Federal Extended Unemployment Benefits program (the "Tiers") also decreased by about  13,000 claims.

1,634,266 FEWER 
people are receiving unemployment benefits now vs. one year ago.  We do not know what has happened to the people who are no longer receiving benefits; we do not know how many of those 1,634,266 people found employment, how many retired, etc.  We do know that there are 1,266,000 more people reporting themselves as employed than a year ago and there are  1,910,000 more non-farm jobs.  We also know that a grand total of 47,546,000 people have been hired between April 2012 and February 2013, the latest month for which numbers are available.  

 

The percent of unemployed people receiving benefits decreased to about 42.1% for the week ending April 13th.


If you are receiving benefits, you may be interested in these two reports:  






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 18,000 over those reported last week.  Last week's initial claims numbers were revised upwards by 3,000.  There are usually slight upwards revisions  (1,000 to 3,000) in the numbers of initial claims in most weeks.  Numbers reported this week also reflected changes in seasonal adjustments announced last month.  (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 April 27, the advance figure for seasonally adjusted initial claims was 324,000, a decrease of 18,000 from the previous week's revised figure of 342,000. The 4-week moving average was 342,250, a decrease of 16,000 from the previous week's revised average of 358,250.

The initial claims as announced last week were 339,000, so the claims from that week were revised upwards by 3,000 to 342,000. 


Current February/March/April 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-Spring initial claims numbers since late 2007/early 2008, with this week's report being particularly low.
  

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, increased by 12,000 for the week ending April 20th after decreasing by 86,000  the week before.  3,019,000 people filed continuing regular state claims in the week ending April 20th.  As a whole, continuing regular claims continue to decline despite some individual weekly increases.  (There were 3,309,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance is 42.1% of the officially unemployed for the week ending April 13th.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending April 13th, 4,963,449 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 11,815,000 people who are unemployed in unadjusted numbers according to the monthly March unemployment situation report which was released Friday, April 5th.  Those numbers, showing that only 42.1% 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 April 13th.  

As of the week ending April 13th, only 325 people were still receiving Extended Benefits, as mentioned above.  As recently as April 2012, 412,411 people were receiving Extended Benefits.

Therefore, over the last year, 99.9% of the people who were receiving Extended Benefits are no longer receiving such benefits.  We do not know how many of these 412,000 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!



1 comment:

  1. A comment from Facebook:

    "How many people have actually found work/vs those that lost their unemployment benefits??????!!!!!!!!"

    My reply:

    "Some weeks (at least 13) of extended benefits are still available in every state. Thus, when the number of continuing regular state claims decreases and the number of extended claims in the tiers does NOT increase, this is a sign that people have stopped collecting... not due to running out of benefits, as they could still get benefits on the tiers, but probably due to finding work. Why else would someone stop collecting on regular state claims and not move to the tiers?

    Since the beginning of the year, the average number of continuing regular state claims has decreased by 14,000 each week.

    We had about 3,200,000 continuing regular claims each week in January, now we have just over 3,000,000.

    Over the past year continuing regular state claims have decreased about 5,000 a week.

    From the article:

    " 1,634,266 FEWER people are receiving unemployment benefits now vs. one year ago (in all programs). We do not know what has happened to the people who are no longer receiving benefits; we do not know how many of those 1,634,266 people found employment, how many retired, etc. We do know that there are 1,266,000 more people reporting themselves as employed than a year ago and there are 1,910,000 more non-farm jobs. We also know that a grand total of 47,546,000 people have been hired between April 2012 and February 2013, the latest month for which numbers are available."

    In January and February, employers reported the lowest levels of layoffs and discharges for those two months in over 12 years. Over the past year, employers have been hiring over 4,000,000 people a month, and laying off or firing less than 2,000,000 people a month.

    ReplyDelete

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