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Thursday, May 16, 2013

Weekly Initial Unemployment Claims Jump


Weekly unemployment initial claims increased by 32,000 this week to 360,000.  The increase follows two weeks of initial claims in the 320,000 range AND 3 out of 6 weeks of significant decreases in initial claims.  Weekly claims numbers tend to be volatile and weekly seasonal adjustment factors can also throw the numbers off, so we won't know if this increase is meaningful until we see if it becomes a pattern (or does not become a pattern) over the next few weeks.  (The chart below shows that a significant increase in initial claims at the end of March did not continue.)  


First time unemployment jobless claims increased to 360,000  for the week ending May 11th.   This is a sizable increase of 32,000 claims.  Since the beginning of the year, new weekly claims have remained in the 325,000 to 365,000 range for sixteen out of the past nineteen weeks.  This week's number is an increase after two weeks of claims numbers in the 320,000 range. 

The four-week moving average # of claims increased by 
1,250 last week after decreasing by 5,000 the week before.  It is now 399,250.  Initial claims continue 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 27th, 4,843,806 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 31,000  overall 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 57,747.  Continuing claims in the Federal Extended Unemployment Benefits program (the "Tiers") increased  by about  29,000 claims.

1,429,702 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 1,429,702 people found employment, how many retired, etc.  We do know that there are 1,729,000 more people reporting themselves as employed than a year ago and there are  2,094,000 more non-farm jobs.  We also know that a grand total of 51,838,000 hires have been made by employers between April 2012 and March 2013, the latest month for which numbers are available.  (Some people may have been hired more than once during the year, so the number of "hires" is generally higher than the number of people who have been hired.)   

 

The percent of unemployed people receiving benefits increased to about 44.0% for the week ending April 27th.


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:  2013) and the past three years (blue:  2010green:  2011 and black:  2012) 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.  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.




In the week ending May 11, the advance figure for seasonally adjusted initial claims was 360,000, an increase of 32,000 from the previous week's revised figure of 328,000. The 4-week moving average was 339,250, an increase of 1,250 from the previous week's revised average of 338,000.
As usual, to put all of this into perspective, check out the red line on the chart above to see where jobless claims are now, in 2013, compared to the past three years.

First time unemployment claims increased by 37,000 over those reported last week.  Last week's initial claims numbers were revised upwards by 5,000.  There are usually slight upwards revisions  (1,000 to 3,000) in the numbers of initial claims in most weeks.  (The chart above shows REVISED claims numbers.)

The initial claims as announced last week were 323,000, so the claims from that week were revised upwards by 5,000 to 328,000. 


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.
  

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, decreased by 4,000 for the week ending May 4th after decreasing by 19,000  the week before.  3,009,000 people filed continuing regular state claims in the week ending May 4th.  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 44.0% of the officially unemployed for the week ending April 27th.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending April 27th, 4,843,406 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 11,014,000 people who are unemployed in unadjusted numbers according to the monthly April unemployment situation report which was released Friday, May 3rd.  Those numbers, showing that only 44.0% 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) No Longer Available in any State



Extended Benefits claims were only available in Alaska during the weeks ending April 27th and May 4th.  Extended Benefits are no longer available in Alaska (or any other state) starting the week ending May 11th.  

As of the week ending April 27th, only 502 people were still receiving Extended Benefits, as mentioned above.  A year ago, 304,755 people were receiving Extended Benefits.  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 305,000 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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