First-Time Jobless Claims Edge Up as 2013 Begins

First-Time Jobless Claims Edge Up as 2013 Begins

01/10/2013 BY: MARK LIEBERMAN, FIVE STAR INSTITUTE ECONOMIST

 

First-time claims for unemployment insurance rose 4,000 to 371,000 for the week ended January 5, the Labor Department reported Thursday. Economists expected claims to drop to 362,000 from the prior week.

The previous week’s report was revised downward to 367,000 from the originally reported 372,000, the first time since April. The unusual volatility reflected both intervening holidays and the quick downsizing by retailers who had staffed up for holiday shopping.

Continuing claims—reported on a one-week lag—dropped 127,000 to 3,109,000 for the week ended December 29. The previous week’s initial report of 3,245,000 continuing claims was revised downward to 3,236,000. The continuing claims data series tracks the number of longer term unemployed who qualify for regular state jobless benefits. The sharp drop in continuing claims reflected both a relatively steep decline in first-time claims since months ago and that fewer states qualify for emergency benefits.

The report included the final data for claims for 2012 when weekly initial claims filings averaged 374,673, below 400,000 for the first time since 2007 when initial claims averaged 321,135 per week. The Great recession began in December 2007, and according to the National Bureau of Economic Research, ended in June 2009. In 2009, unemployment insurance claims averaged 574,173 per week.

The total number of people claiming benefits in all programs for the week ending December 22 was 5,356,271, a decrease of 51,335 from the previous week. There were 7,333,322 persons claiming benefits in all programs in the comparable week in 2012.

The Labor Department said states reported 1,991,454 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending December 22, a decrease of 74,252 from the prior week. There were 2,926,676 persons claiming EUC in the comparable week in 2012. Extended Benefits were not available in any state during the week ending December 22.

Both the extended and emergency benefit programs were tied up in the “fiscal cliff” negotiations.

According to the BLS, 12,248,000 persons were officially considered unemployed in December, which means that of those individuals counted as unemployed, 6.89 million were not receiving any form of government unemployment insurance, up from 6.81 million one week earlier.

States have been borrowing from the federal government to cover shortfalls in those funds which will eventually have to be repaid—unless Congress intervenes—with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of January 7, 21 states have an aggregate $27.4 billion in outstanding loans to cover shortfalls, up from $27.1 billion one week earlier. California accounted for 37.9 percent of the borrowing.

According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending December 29 were in Michigan (+15,107), Pennsylvania (+12,483), Wisconsin (+6,748), New Jersey (+3,436), and Missouri (+3,057), while the largest decreases were in Florida (-11,015), Texas (-7,475), Virginia (-3,148), Illinois (-2,755), and Oklahoma (-1,782).

Hear Mark Lieberman ever Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 am eastern time and at 9:40 am.

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