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Thursday, July 18, 2013

Weekly Initial Claims Decline

Weekly unemployment initial claims decreased by 24,000 this week to 334,000 after increasing substantially last week.  While weekly claims continue to fluctuate, they are 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.  This is particularly true the first two weeks of a quarter when more people generally file for unemployment insurance.  As this past week was the second week of the quarter (after a large spike last week, the first week of the quarter) , we'll have to watch over the next few weeks to see if this "noise" around the start of the quarter is at all  significant. 

 

First time seasonally adjusted unemployment jobless claims declined to 334,000  for the week ending July 13th, a decrease of 24,000 claims.  Since the first week of March, 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, decreased by 
5,250 last week after increasing by 6,000 the week before.  It is now 346,000.  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 29th, 4,519,501 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 2,000  overall claims since the previous week. The decrease was due to a 24,000 decline in the number of people receiving benefits under the Federal Extended Benefits program (the "Tiers") while claims made under the Regular State program (the first 19 to 26 weeks) increased about 27,000.


About 1,234,000 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 1,234,000 people found employment, how many retired, and how many are still looking for work.  We do know that:

  • There are 1,610,000 more people reporting themselves as employed than a year ago.
  • There are  2,293,000 more non-farm jobs.  
  • We also know that a grand total of 51,864,000 hires have been made by employers between May 2012 and May 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.)  
  • However, according to the Bureau of Labor Statistics JOLTS (Job Openings, Layoffs, and Turnover Survey) for May 2013, we still have about 3.1 active jobseekers for every job opening out there. 
  • The percent of unemployed people receiving benefits dropped significantly to about 36.9% for the week ending June 29th.


If you are receiving benefits, you may be interested in these 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 July 13, the advance figure for seasonally adjusted initial claims was 334,000, a decrease of 24,000 from the previous week's revised figure of 358,000. The 4-week moving average was 346,000, a decrease of 5,250 from the previous week's revised average of 351,250.
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 decreased by 26,000 over those reported last week.  Last week's initial claims numbers were revised downwards by 2,000.  There are usually slight upwards revisions  (1,000 to 3,000) in the numbers of initial claims in most weeks, so a downwards revision is unusual.  (The chart above shows REVISED claims numbers.)

The initial claims as announced last week were 360,000, so the claims from that week were revised downwards by 2,000 to 3580,000. 


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, increased by 91,000 for the week ending June 29th after increasing by 70,000  the week before.  3,114,000 people filed continuing regular state claims in the week ending July 6th.  As a whole, continuing regular claims continue to decline slowly despite some individual weekly increases.  (There were 3,317,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance is a very low 36.9% of the officially unemployed for the week ending June 29th.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending June 29th, 4,519,501 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 12,248,000 people who are unemployed in unadjusted numbers according to the monthly June unemployment situation report which was released Friday, July 5th.  Those numbers, showing that only 36.9% 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 29th, only 433 people were still receiving Extended Benefits, as mentioned above.  A year ago, 41,113 people were receiving Extended Benefits.  As recently as April 2012, 412,411 people were receiving Extended Benefits.

Therefore, over the 15 months, 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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