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Thursday, May 5, 2011

Weekly Unemployment: Initial Claims Up May 5, 2011

Weekly Initial Unemployment Claims Up Again.

Weekly initial claims for unemployment benefits were up again, this time by 43,000 seasonally adjusted and 25,000 unadjusted.  The Labor Department claims that the increase this week reflected a high number of schools that were on spring break, and school workers who were claiming unemployment for that week.

Perhaps that is true, but it doesn't make much sense.  Won't they be right back at work after the spring break?  Why isn't spring break counted as a vacation?  Do school cafeteria workers and bus drivers really get unemployment for being on a scheduled vacation?

Is this the beginning of a trend?

Even if this number was inflated by school personnel, it marks the third week out of four that initial claims have gone up.  More significantly, it is the 6th week out of  7 that the "four week average" number of claims has gone up.  The "4 week average" smooths out the ups and downs of the weekly numbers and is supposed to be a more accurate reflection of where the unemployment numbers are going.        

A few weeks can't be taken as real evidence that the job market is opening up or shutting down.  We'll have to wait a few more weeks to see if this trend continues.  However, the initial claims haven't been this high since late January.  The trough, the lowest number of initial claims since the recession began, occurred in late February, and initial claims figures have been dropping much of this year. 

8 months since the initial rate was this high?

It appears that we hit this high number of initial claims back last October, six months ago.  We hit this high number of claims using 4 week averaging last January.  So it is an upwards bounce, but it's still in the wait-and-see range.  I 

1,600,000 More out of Work?

A question often posed about the initial claims numbers:  There are a total of about 1,600,000 million new claims this month.  With only a few hundred thousand more jobs, aren't we still losing over a million jobs a month?

I've been trying to find out exactly what constitutes an "initial claim".  We know we aren't still losing a million jobs a month; we've been adding jobs for the last few months, so there must be many more initial claims than there are people who will wind up counted as unemployed.  I know that construction workers and seasonal workers file a claim whenever they are out of work, and many are called back to work after a short time off.  But I've been searching and Googling and searching for awhile now, and I can't find a good explanation of exactly what constitutes an "initial claim", and why those numbers are so much higher than "real" unemployment numbers.

2,000,000 Fewer Collecting Benefits This Year vs. Last. 

In any event, the total number of people collecting benefits on any claim (Regular state, Federal extended, State extended benefits and a few other smaller programs), is still going down.  10,524,000 people collecting a year ago; 8,015,000 collecting now.  We have no idea how many of the ten million from a year ago found jobs, how many are still on unemployment now, and how many dropped off of the rolls.  That's a tragedy.  We don't make any efforts to follow up on those who have stopped getting UI.

"Painful" and "Ugly" Fixes for the Economy 

Meanwhile, I read suggestion after suggestion about how to fix the economy including many tough love suggestions.  It's going to get ugly out there, say some.  It will be painful, say others.  But somehow the people talking gleefully about the pain and suffering of others as the economy gets "fixed" don't seem to care as long as they aren't losing their jobs, their savings, their homes.  Pain and suffering, I guess, is for the "little people" who are just not superior enough to work through the recession.

Enough about that.  

Suggested Reading:

Finally, I found this column written a couple of months ago on stockbloghub.  It provides a great.overview on many of these same issues regarding unemployment and counting the unemployed.

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