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Thursday, July 19, 2012

Weekly Initial Unemployment Claims Jump (July 14, 2012)

First time unemployment jobless claims increase by 34,000 for week ending July 14th.  Despite this increase, the four-week moving average # of claims decreased  by 1,500.

For the week ending June 30th, 5,752,116 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 drops to

Extended Benefits claims continue to decline by another 6.5% as fewer people from fewer states are eligible for Extended Benefits.  Only 7.6%  of the number of people who were receiving Extended Benefits a year ago are receiving Extended Benefits this year.

First time unemployment claims increased by a substantial 34,000 over those reported last week.  Last week's claims were revised upwards by 2,000.  The four-week moving average decreased by 1,500.  This is the first week of increases after three weeks of declines.  As a whole, claims have been stable this spring and summer except for the last two weeks.  There have been slight upwards revisions in the initial claims numbers in nine out of the last ten 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 14, the advance figure for seasonally adjusted initial claims was 386,000, an increase of 34,000 from the previous week's revised figure of 352,000. The 4-week moving average was 375,500, a decrease of 1,500 from the previous week's revised average of 377,000

The initial claims as announced last week were 350,000, 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

    Mid June-early July 2012 4-week moving average:  375,500 

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, increased 1,000 for the week ending July 7th after decreasing by 5,000 week before.  3,314,000 people filed continuing regular state claims in the week ending July 7th.  As a whole, continuing regular claims continue to decline despite some individual weekly increases.  (There were 3,727,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance decreased slightly to 45.1% of officially unemployed for the week ending June 30th.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending June 30th, 5,752,116 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 45.1% 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; 6.5% 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 23rd, 43,972 people were still receiving Extended Benefits.  However, for the week ending June 30th, this number declined to 41,108, a reduction of about 6.5%.  I mentioned last 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, 88.3% of the people who were receiving Extended Benefits are no longer receiving such benefits.  We do not know how many of these 309,471 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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