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Thursday, July 12, 2012

Weekly Initial Unemployment Claims Down Significantly (July 7, 2012)

First time unemployment jobless claims decrease by 26,000... Four-week moving average # of claims decreases  by 9,750.

Extended Benefits claims decline by another 7% as fewer states are eligible for Extended Benefits.  Only 7%  of the number of people who were receiving Extended Benefits a year ago are receiving Extended Benefits this year.

For the week ending June 23rd, 5,874,035 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). 

Percent of Unemployed People Receiving Benefits is stable at 

First time unemployment claims decreased by a significant 26,000 over those reported last week.  Last week's claims were revised upwards by 2,000.  The four-week moving average decreased by 9,750.  This is the third week in a row that initial claims have decreased.  As a whole, claims have been stable this spring, but with slight upwards revisions in the last eight of nine weeks.  (The chart below shows REVISED claims numbers.)

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 and early summer of 2012, compared to spring and early summer of the past three years.

From the current report:
In the week ending July 7, the advance figure for seasonally adjusted initial claims was 350,000, a decrease of 26,000 from the previous week's revised figure of 376,000. The 4-week moving average was 376,500, a decrease of 9,750 from the previous week's revised average of 386,250.
The initial claims as announced last week were 374,000, so the claims from that week were revised upwards by 2,000. 

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- 2009green- 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.

Current Spring-summer Initial Claims Lowest Since 2008; Historical Claims Data Below

As a whole, the current numbers of initial claims continue to be the lowest spring-summer initial claims numbers since 2008, as can be seen on the chart above.  

Average initial claims for this time of year for earlier years include:

  • June-early July 2000:  289,000
  • June-early July 2001:  388,000
  • June-early July 2002:  388,000 
  • June-early July 2003:  424,000
  • June-early July 2004:  344,000
  • June-early July 2005:  326,000 
  • June-early July 2006:  308,000
  • June-early July 2007:  317,000
  • June-early July 2008:  382,500

    June-early July 2012 4-week moving average:  386,250 

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, decreased 14,000 for the week ending June 30th after increasing the week before.  As a whole, continuing regular claims continue to decline despite some individual weekly increases.  (There were 3,737,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance stays the same at 46.1% of officially unemployed.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending June 23rd, 5,874,035 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 12,749,000 people who are unemployed according to the monthly June unemployment situation report which was released last week.  Those numbers, showing that only 46.1% 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.

Extended Benefits Expire; 7% Fewer People Receive Extended Benefits

As we've been mentioning, many states have now "triggered" off of Extended Benefits.  There are now only 4 states in which Extended Benefits were still available.  Those states were:  Rhode Island, Idaho, Nevada, and New Jersey.  All other states have triggered off of Extended Benefits.

Rhode Island, Nevada, and New Jersey will trigger off of Extended Benefits as of the second week of July.  The only state left with Extended Benefits as of mid-July will be Idaho.

As of the week ending June 16th, 47,425 people were still receiving Extended Benefits.  However, for the week ending June 23rd, this number declined to 43,972, a reduction of about 7%.  I mentioned in the past month that we could expect that the total number of people receiving unemployment benefits would decline to below 6,000,000 as Extended Benefits expire, which did happen several weeks ago.  In late April, 350,579 people were receiving Extended Benefits.

In two months, 87.5% of the people who were receiving Extended Benefits are no longer receiving such benefits.  We do not know how many of these 307,000 people found jobs or how many have another source of income. 

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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