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Thursday, January 17, 2013

Weekly New First-Time Unemployment Claims Take a Tumble

January jobs reports to be released Friday, February 1st.  Check back for updates!

First time unemployment jobless claims decreased significantly by 37,000 for the week ending January 12th.  The four-week moving average # of claims decreased by 6,750.  First time claims are now at about the same level that they were in late 2007 to early 2008.

(Even though these numbers are seasonally adjusted, claims numbers around the holidays do tend to be volatile and should only be analyzed in terms of a trend over a period of weeks.  See the graph below.) 

For the week ending December 29nd, 5,821,966 people were receiving unemployment benefits under one of the programs that are available (regular state, federal extended unemployment compensation, or a few other smaller programs).  This was an increase of 465,000 continuing claims since the previous week, a fairly typical increase for the week after Christmas.

Some of the increase in continuing claims could also have been due to confusion related to the expiration of the unemployment extensions and the subsequent fiscal cliff deal.  The numbers of continuing claims may have been more volatile than usual.  Unemployment extensions did expire December 29th, but they were then continued as part of the fiscal cliff deal on January 2nd.  People who have not yet exhausted all of their available unemployment extensions are still eligible to collect under the EUC program. 

Percent of Unemployed People Receiving Benefits increased to about 

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-2012-13) and the past three years (blue- 2009-10green- 2010-11 and black- 2011-12) 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.  You can also see the impact of Hurricane Sandy on claims in November 2012. 

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.

First time unemployment claims decreased by 37,000 over those reported last week.  Last week's initial claims numbers were revised upwards by  1,000.  There have usually been slight upwards revisions  (1,000 to 3,000) in the numbers of initial claims in most of the weeks of the past four months.  (The chart above shows REVISED claims numbers.)

As usual, to put this into perspective, check out the red line on the chart above to see where jobless claims are now, in late 2012/early 2013, compared to the past three years.

From the current report:
In the week ending January 12, the advance figure for seasonally adjusted initial claims was 335,000, a decrease of 37,000 from the previous week's revised figure of 372,000. The 4-week moving average was 359,250, a decrease of 6,750 from the previous week's revised average of 366,000.
The initial claims as announced last week were 371,000, so the claims from that week were revised upwards by 1,000. 

Current December/January Initial Claims Continue to be the Lowest Since Late 2007/Early 2008.

As a whole, the current numbers of initial claims continue to be the lowest December/January initial claims numbers since late 2007/early 2008.

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program, increased 87,000 for the week ending January 5th after decreasing 109,000 the week before.  3,214,000 people filed continuing regular state claims in the week ending January 5th.  As a whole, continuing regular claims continue to decline despite some individual weekly increases.  (There were 3,497,000 continuing claims a year ago.) 

Total number of people receiving unemployment insurance increased to 49.2% of the officially unemployed for the week ending December 29nd.  

The weekly report also tells us the total number of people who are receiving unemployment benefits.  For the week ending December 29th, 5,821,966 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 11,844,000 people who are unemployed according to the monthly December unemployment situation report which was released two weeks ago.  Those numbers, showing that only 49.2% 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) Expire

Extended Benefits claims have expired as NO states were eligible for Extended Benefits in the latest report.  

As of the week ending December 22nd, only 1,143 people were still receiving Extended Benefits, as mentioned above.  As recently as late April, 350,579 people were receiving Extended Benefits.  A year ago, 533,172 people were receiving Extended Benefits.

Therefore, in about eight months, 99.7% of the people who were receiving Extended Benefits are no longer receiving such benefits.  We do not know how many of these 348,000 people found jobs, how many have another source of income in the family, and how many have nothing. 

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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