NOV Fri, Dec 2: +178,000 jobs. Unemployment rate drops to 4.6%.NOV details here!.. Jobs since Obama took office?... Unemp. rate under Obama?

Thursday, December 5, 2013

Weekly Unemployment Claims Recovering from October Government Shutdown

Yes, the government shutdown did hurt employment for a number of weeks.

All we need to do is to look at the weekly unemployment claims over the past two months.

Back in mid-September, the number of claims was heading down with a bullet.


Look at the numbers for September 2013 (the red line) in the chart above.  Notice what happened in the first week of October.  Though government workers are back to work, the number of requests for unemployment insurance has only now, two months later, approached what it was in September.  The increase in claims in October over September is probably due to a ripple effect as the shutdown and the concerns about the debt ceiling standoff have percolated throughout the economy.

It's simple:  Bad, destructive government has consequences. 


Weekly unemployment initial claims decreased by 23,000 this week to 298,000 after decreasing 5,000 last week.  

(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 above.)


First time seasonally adjusted unemployment jobless claims declined to 
298,000  for the week ending November 30th, a decrease of 23,000 claims.  New weekly claims had stayed below 350,000 for three months from July until September.  Then came the government shutdown in October.  Though new claims have decreased since the first week of October, we are only now, two months later, at the same levels of initial claims of September.    


The four-week moving average # of claims, which smooths some of the week-to-week volatility, is finally decreasing as the weeks of high numbers of claims in October are dropped from the calculation.  The moving average decreased by 
10,750 last week after increasing by 6,250 the week before.  It is now
 322,250.

Overall, initial claims are now at about the same level they were six years ago, in early to mid 2007. (Unemployment claims started to climb in October through December 2007.) 


Initial Claims Graph:


The chart at the top of the page 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.  The number of initial unemployment claims had been on a downward trajectory in summer, but it increased steeply during October, though it is now decreasing again.  

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.
Continuing Claims?

For the week ending November 16th, 
4,096,901 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 183,000 claims in total since the previous week.  Regular state claims (the first 19 to 26 weeks of claims) also increased by a total of 134,000.  The number of people receiving benefits under the Federal Extended Benefits program (the "Tiers") increased about 46,000.   

Though the number of continuing claims increased for the week ending November 16th, the total 
number of regular state claims has been below 3,000,000 in seasonally adjusted numbers since mid August, and the number of regular state claims decreased slightly in the week ending November 23rd.  (At the peak of the Crash, in early 2009, about 6,500,000 regular state claims were filed a week.) 

Benefits Now vs. a Year Ago?


About 860,000
 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 860,000+ people found employment, how many retired, and how many are still looking for work.  We do know that:

  • There are 240,000 MORE people reporting themselves as employed than a year ago (though this number has been impacted by the October government shutdown).
  • There are  2,329,000 MORE non-farm jobs than a year ago.
  • We also know that a grand total of 52,722,000 hires have been made by employers between October 2012 and September 2013.  Some people may have been hired more than once during the year, so the number of "hires" is generally higher than the number of additional people with jobs.   
  • However, according to the Bureau of Labor Statistics JOLTS (Job Openings, Layoffs, and Turnover Survey) for September 2013, we still have about 2.9 active jobseekers for every job opening out there (down from around 7 jobseekers for every job opening at the peak of the recession in late 2009.) 
  • The percent of unemployed people receiving benefits his now 38% for the week ending November 16th.  (A year ago, 42.2% of the unemployed were receiving benefits.)





Current Spring Initial Claims Continue to be the Lowest Since  2007.

From 
the current report:
In the week ending November 30, the advance figure for seasonally adjusted initial claims was 298,000, a decrease of 23,000 from the previous week's revised figure of 321,000. The 4-week moving average was 322,250, a decrease of 10,750 from the previous week's revised average of 333,000.
As usual, to put all of this into perspective, check out the red line on the chart at the top of the page to see where jobless claims are now, in 2013, compared to the past three years.

First time unemployment claims decreased by 18,000 over those reported last week.  Last week's initial claims numbers were revised upwards by 5,000 claims.  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.)

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


Continuing claims also decreasing.
  

Continuing regular state claims in seasonally adjusted numbers, from people who are continuing to claim unemployment through the initial 19 to 26 week regular unemployment program, decreased by 21,000 for the week ending November 23rd after decreasing by 102,000  the week before.  2,744,000 people filed continuing regular state claims in the week ending November 23rd.  As a whole, continuing regular claims continue to decline slowly despite some individual weekly increases.  (There were 3,216,000 continuing claims a year ago.)
 

Total number of people receiving unemployment insurance is a very low 38% of the officially unemployed for the week ending November 16th.
  
The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending November 16th, 4,096,901 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 10,773,000 people who are unemployed in unadjusted numbers according to the monthly October unemployment situation report which was released Friday, November 8th.  Those numbers, showing that only 38% 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) Still Not Available in any State




As of the week ending November 16th, only 216 people were still receiving Extended Benefits, as mentioned above.  A year ago, 37,096 people were receiving Extended Benefits.  As recently as April 2012, 412,411 people were receiving Extended Benefits.

Therefore, over the 18 months, 99.99% 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!



No comments:

Post a Comment

I appreciate intelligent comments and questions, including those that are at odds with anything posted here. I have elected not to screen comments before they are published; however, any comments that are in any way insulting, caustic, or intentionally inflammatory will be deleted without notice. Spam will also be immediately deleted.