First-Time Jobless Claims Jump to Two-Month High

First-Time Jobless Claims Jump to Two-Month High

07/11/2013 BY: MARK LIEBERMAN, FIVE STAR INSTITUTE ECONOMIST

First-time claims for unemployment insurance jumped a surprising 16,000 to 360,000 for week ending July 6, the highest level since mid-May, the Labor Department reported Thursday. Economists expected the number of claims to drop to 337,000 from the 343,000 originally reported for the week ended June 29. The number of filings for that week was revised up to 344,000.

The number of persons continuing to collect unemployment insurance for the week ended June 29, reported on a one week lag, also increased, up 24,000 to 2,977,000. The number of continuing claims for the week ended June 22 was revised up to 2,953,000 from the originally reported 2,933,000.

The unemployment claims report has been released a day early—last Wednesday—instead of the usual Thursday because of the July 4 holiday. The shorter processing time could have contributed to the abrupt increase.

The four-week moving average of first-time claims though increased 6,000 to 351,750, the largest week-to-week increase since the end of May, pushing the average to its highest level in more than a month. The four-week moving average of continuing claims declined 3,500 to 2,970,750 for the period ended June 29, the lowest level since May 2008.

Although adjusted for seasonal events such as holidays and other predictable, recurring factors, the report covered some of a four-day work week for government who process claims filed electronically.

The report on new and continuing claims will have no impact on the monthly employment situation report for July to be released by the Bureau of Labor Statistics on August 2. That report will be based on employment and jobs data for the week of the month including the 12th calendar day—matching the claims data to be reported next week.

Even with the week-to-week increase in first time claims and continuing claims, labor markets continue to show improvement over last year. First-time claims year-to-date have averaged just under 350,000, down about 25,000 from 2012 and the lowest weekly average since 2007.

Continuing claims—which reflect the ability of out-of-work individuals to get new jobs—have averaged just under 3.1 million each week this year, down from 3.32 million in 2012, also the lowest weekly average since 2007. Continuing claims data though are affected by the federal budgetary sequester as a result of which many states reduced the number of weeks or the amount of benefits.

The Labor Department reported the total number of people claiming benefits in all programs for the week ending June 22 was 4,505,508, a decrease of 52,257 from the previous week. There were 5,874,101 persons claiming benefits in all programs in the comparable week in 2012. Extended Benefits were not available in any state during the week ending June 22.

According to the BLS, 11,777,000 persons were officially considered unemployed in June with 4,328,000 “long-term” unemployed that is, out of work for at least 27 weeks. Of those individuals counted as unemployed, 7.27 million were not receiving any form of government unemployment insurance for the week ended June 22, up about 70,000 from the week earlier.

The Labor Department also reported 1,644,987 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending June 22, a decrease of 22,877 from the prior week. There were 2,606,287 persons claiming EUC in the comparable week in 2012. EUC benefits this year were directly threatened by the federal budget sequester.

According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending June 29 were in New Jersey (+6,068), New York (+2,824), Connecticut (+2,802), Michigan (+1,814), and Washington (+1,573), while the largest decreases were in California (-9,323), Florida (-3,245), Pennsylvania (-2,628), Massachusetts (-1,973), and Maryland (-1,715).

California, the Labor Department said, reported fewer layoffs in the service sector as did Pennsylvania, while citing fewer construction and manufacturing industries as the reason filings dropped. New Jersey and New York said there were more layoffs in transportation and warehousing, while Connecticut reported an increase in layoffs in educational services.

Hear Mark Lieberman on P.O.T.U.S. radio, Sirius-XM 124, Friday, at 6:20 am Eastern Time._

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