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Thursday, March 27, 2014

Weekly Initial Jobless Unemployment Claims Decline

Initial unemployment (jobless) claims continued their decline for the week ending March 22nd. 311,000 first time claims were filed, a number solidly in the range of first time claims back in August and September 2013, before the federal government shutdown in October. 

We were sure that layoffs were really down, lower than they had been since early 2007, in the late summer, as can be seen on the graph below.

The government shutdown in October reversed that, at least temporarily, as initial unemployment claims spiked. The numbers started declining as soon as the government was back to work, but the numbers didn't get down to those late summer lows.

Then initial claims spiked the week after Thanksgiving, probably due to seasonal adjustments and the short time between Thanksgiving and Christmas.  The numbers then declined until mid-January, jumped a bit and have declined again started a solid decline.  We don't know how much of an impact the severe winter, which impacted just about the whole country, had on initial claims in January and February.  

Weekly unemployment initial claims decreased by 1,000 this week, the week ending March 22nd, to 311,000 after increasing by 6,000 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.)

The four-week moving average # of claims, which smooths some of the week-to-week volatility, decreased.  The moving average decreased by 9,500 last week after increasing by 15,750 the week before.  It is now 317,750.

Overall, initial claims are now at about the same level they were six years ago, in late 2007 to very early 2008. (Unemployment claims started to climb in October through December 2007.)

the current report:
In the week ending March 22, the advance figure for seasonally adjusted initial claims was 311,000, a decrease of 10,000 from the previous week's revised figure of 321,000. The 4-week moving average was 317,750, a decrease of 9,500 from the previous week's revised average of 327,250.
First time unemployment claims decreased by 7,000 over those reported last week.  Last week's initial claims numbers were revised upwards by 1,000 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.)

Initial Claims Graph:

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 2014, compared to the past three years.

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:  2013-14) and the past three years (blue:  2010-11green:  2011-12 and black:  2012-13) 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, then declined, then increased in the week after Thanksgiving, but has been generally declining since then, despite a spike last week.  

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 March 8th, 
3,306,871 people were receiving unemployment benefits under one of the programs that are available (regular state or a few other smaller programs).  This was a decrease of about 43,000 claims in total since the previous week.  Regular state claims (the first 19 to 26 weeks of claims) decreased by 45,000 claims; that is, the decline in regular state continuing claims accounted for most of the decrease in continuing claims for that week.  As the Federal Extended Benefits program (the "Tiers") have still not been renewed, nobody received has received those benefits since the week ending December 28th.  Though the Senate has worked out a deal to extend unemployment benefits, the Republicans in the House of Representatives have indicated that they will not bring that measure to a vote. 

For the week ending March 15th, seasonally adjusted continuing unemployment claims in the regular state program decreased by 53,000 claims after increasing by 28,000 the week before.  We now have 2,823,000 continuing claims.  The total number of continuing claims has stayed below 3,100,000 for about a year, since March 2013.  
(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 2,150,000 FEWER people are receiving unemployment benefits now vs. one year ago.  Between 1 million and 1.4 million of these people are people who might be eligible for extended benefits if the program were available.  Let's remember that we do not know what has happened to the people who are no longer receiving benefits; we do not know how many of those two million plus people found employment, how many retired, and how many are still looking for work.  We do know that:

  • There are 1,802,000 MORE people reporting themselves as employed than a year ago.
  • There are  2,158,000 MORE non-farm jobs than a year ago.
  • We also know that a grand total of 54,285,000 hires have been made by employers between February 2013 and January 2014.  (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 January 2013, we still have about 2.6 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 is now 30.36% for the week ending March 8th.  (A year ago, 46.2% of the unemployed were receiving benefits.)

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

People receiving benefits compared to total unemployment?

Total number of people receiving unemployment insurance is a very low 30.4% of the officially unemployed for the week ending March 8th.
The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending March 8th, 3,306,871 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 10,893,000 people who are unemployed in unadjusted numbers according to the monthly February unemployment situation report which was released Friday, March 7th.  Those numbers, showing that only 30% 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; Federal Extended benefits (the Tiers) have not been restored.

Let's remember that, 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.

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