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Thursday, June 20, 2013

Weekly Initial Unemployment Claims Up and Down

Weekly unemployment initial claims increased by 18,000 this week to 354,000 after decreasing the last two weeks.  Weekly claims seem unable to break below a mid 300,000 range of claims, as is obvious from the chart below.

Weekly claims numbers tend to be volatile and weekly seasonal adjustment factors can also throw the numbers off, so any one week change is not meaningful until we see if it becomes a pattern (or does not become a pattern) over a series of weeks.
  (For instance, 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 354,000  for the week ending June 15th.   This is a modest increase of 18,000 claims.  Since the beginning of the year, new weekly claims have remained in the 325,000 to 365,000 range for nineteen out of the past twenty weeks.  

The four-week moving average # of claims, which smooths some of the week-to-week volatility, increased by 
2,500 last week after decreasing by 6,750 the week before.  It is now 348,250.  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 June 1st, 4,533,560 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 increase of about 18,000  overall claims since the previous week.  Most of the increase was in the number of continuing claims in the Regular State program (the first 20 to 26 weeks of unemployment benefits), which increased by 35,000.  Continuing claims in the Federal Extended Unemployment Benefits program (the "Tiers") decreased  by about  19,000 claims.

About 1,285,000 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 1,285,702 people found employment, how many retired, and how many are still looking for work.  We do know that there are 1,596,000 more people reporting themselves as employed than a year ago and there are  2,115,000 more non-farm jobs.  We also know that a grand total of 52,084,000 hires have been made by employers between April 2012 and April 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 40.1% for the week ending June 1st.

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 June 15, the advance figure for seasonally adjusted initial claims was 354,000, an increase of 18,000 from the previous week's revised figure of 336,000. The 4-week moving average was 348,250, an increase of 2,500 from the previous week's revised average of 345,750.
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 20,000 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 weeks.  (The chart above shows REVISED claims numbers.)

The initial claims as announced last week were 334,000, so the claims from that week were revised upwards by 2,000 to 336,000. 

Current Spring 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 40,000 for the week ending June 8th after increasing by 20,000  the week before.  2,951,000 people filed continuing regular state claims in the week ending June 8th.  As a whole, continuing regular claims continue to decline despite some individual weekly increases.  (There were 3,318,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance is 40.1% of the officially unemployed for the week ending June 1st.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending June 1st, 4,533,560 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 11,302,000 people who are unemployed in unadjusted numbers according to the monthly May unemployment situation report which was released Friday, June 7th.  Those numbers, showing that only 40.1% 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) No Longer Available in any State

As of the week ending June 1st, only 328 people were still receiving Extended Benefits, as mentioned above.  A year ago, 111,000 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 412,000 people receiving Extended Benefits in April 2012 have 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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