First-Time Jobless Claims Fall Again to 5-Year Low
By: Mark Lieberman, Five Star Institute Economist
First-time claims for unemployment insurance fell to another five-year low for the week ending January 19, dropping 5,000 to 330,000, the Labor Department reported Thursday. Economists expected claims to increase to 360,000 from the prior week.
The previous week’s report was unchanged at 365,000, which had been the lowest level since January 2008.
The week-to-week drop in initial claims was the second in two weeks, a strong beginning to 2013. First-time claims have averaged 347,000 in the first three weeks of the year, down from 364,000 in the last three weeks of 2012; initial claims averaged 375,000 in the first three weeks of 2012, down from 379,000 at the end of 2011.
The weekly report also reflected favorable seasonal adjustment factors, which will continue through mid-February to smooth spikes in layoffs at retail outlets in the aftermath of holiday hiring.
Continuing claims—reported on a one-week lag—dropped 71,000 to 3,157,000 for the week ending January 12. Continuing claims for the week ending January 5 were revised up from the originally reported 3,214,000. 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 six months ago and that fewer states qualify for emergency benefits.
The total number of people claiming benefits in all programs for the week ending January 5 was 5,659,760, a decrease of 214,076 from the previous week. There were 7,670,108 persons claiming benefits in all programs in the comparable week in 2012.
The Labor Department said states reported 1,693,797 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending January 5, a decrease of 365,641 from the prior week. There were 2,922,533 persons claiming EUC in the comparable week in 2012.
Both the extended and emergency benefit programs were tied up in the “fiscal cliff” negotiations.
According to the Bureau of Labor Statistics, 12,248,000 persons were officially considered unemployed in December, which means that of those individuals counted as unemployed, 6.59 million were not receiving any form of government unemployment insurance, up from 6.46 million one week earlier.
States continue to borrow 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 22, 22 states—up from 21 states one week earlier—have an aggregate $28.3 billion in outstanding loans to cover shortfalls, up from $27.9 billion one week earlier. California accounted for 37.8 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 January 12 were in Texas (+12,786), California (+10,232), Florida (+7,314), Indiana (+4,266), and New Jersey (+3,570), while the largest decreases were in New York (-27,487), Georgia (-7,520), North Carolina (-5,541), Alabama (-4,245), and Wisconsin (-3,183).
Hear Mark Lieberman ever Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 a.m. Eastern time and at 9:40 a.m.
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