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Thursday, May 31, 2012

Weekly Unemployment Claims Increase

First time unemployment jobless claims increase by 10,000... and the four-week moving average increases by 3,750.

First time unemployment claims increased by 10,000 over those reported last week.  The four-week moving average increased (3,750) as well, though it didn't increase as much as the four-week moving average decreased last week (5,500).  As a whole, claims have been stable this spring, but they have tended slightly up over the past four weeks, with slight upwards revisions every week.

As usual, to put this into perspective, check out the red line on the chart below to see where jobless claims are now, in spring of 2012, compared to spring of the past three years.

From the current report:

In the week ending May 26, the advance figure for seasonally adjusted initial claims was 383,000, an increase of 10,000 from the previous week's revised figure of 373,000. The 4-week moving average was 374,500, an increase of 3,750 from the previous week's revised average of 370,750.
The initial claims as announced last week were 370,000, so the claims from that week were revised upwards by 3,000. 

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-2012) and the past three years (blue- 2009, green- 2010 and black- 2011) are marked in different colors.  You can see that, as a trend, first time claims for unemployment have gone down SIGNIFICANTLY from one year to the next, even though there are variations within the year.  

Be aware that:  1.  These are first time claims, so people who have continued to receive benefits or who are losing any unemployment benefits would not be 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.

The current numbers of initial claims continue to be the lowest springtime initial claims numbers since 2008.  Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, has continued to drop.  In the week ending May 12th, in unadjusted numbers, they dropped to 3,117,110 from 3,141,342.

Total number of people receiving unemployment insurance decreases.

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending May 12th, 6,137,862 people are 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 12,500,000 people who are unemployed according to the monthly April unemployment situation report which was released earlier in the month.  (The May numbers will be released tomorrow, June 1st.)  Those numbers, showing that less than half 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.

Extended Benefits Expire

Many states have now "triggered" off of Extended Benefits.  Extended Benefits for those states, including California, Illinois, Florida, and several others, were due to end the weekend of May 12th.  On the current weekly report, as of the week ending May 12th, 312,434 people were still receiving Extended Benefits.  However, this number should decrease significantly as Extended Benefits have expired or are expiring for people in many states.  We can expect that the total number of people receiving unemployment benefits will declined to below 6,000,000 due to the end of those benefits.  

So, 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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