By: Mark Lieberman, Five Star Institute Economist
First-time claims for unemployment insurance rose 10,000 to 372,000 for the week ending December 29, the third-lowest level of the year, the Labor Department reported Thursday. Economists expected claims to increase to 363,000.
The previous week’s report was revised upward to 362,000 from the originally reported 350,000, an unusually large revision but reflective of intervening holidays, during which state processing offices were closed.
Continuing claims—reported on a one-week lag—shot up 44,000 to 3,245,000 for the week ending December 22. The previous week’s initial report of 3,206,000 continuing claims was revised downward to 3,201,000. The continuing claims data series tracks the number of longer term unemployed who qualify for regular state jobless benefits.
The report closed the books on claims data for 2012, when weekly initial claims filings averaged 370,076, the lowest since 2007 (when initial claims filings averaged 320,750 per week). In 2009, the average number of new unemployment insurance claims filed each week was 574,173.
This week’s report will have no impact on Friday’s monthly Employment Situation report from the Bureau of Labor Statistics (BLS), which is expected to show the unemployment rate crept up to 7.8 percent in December from 7.7 percent in November.
Payroll processing firm ADP reported Thursday—just ahead of the initial claims data—the private sector added 215,000 jobs in December, up from a revised 148,000 in November and ahead of economists’ forecasts of a gain of 150,000 jobs.
The total number of people claiming benefits in all programs for the week ending December 15 was 5,402,987, a decrease of 68,727 from the previous week. There were 7,223,309 persons claiming benefits in all programs in the comparable week in 2011.
Extended Benefits were not available in any state during the week ending December 15. The Labor Department said reported 2,065,706 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending December 15, a decrease of 30,537 from the prior week. There were 2,932,561 persons claiming EUC in the comparable week in 2011.
Both the extended and emergency benefit programs were tied up in the “fiscal cliff” negotiations and would expire next Tuesday without congressional action.
According to the BLS, unemployment was 12,029,000 in November, which means that of those individuals counted as unemployed, 6.81 million were not receiving any form of government unemployment insurance, up from 6.39 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 December 31, 20 states have an aggregate $27.1 billion in outstanding loans to cover shortfalls, up from $26.9 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 22 were in Ohio (+8,795), Michigan (+6,641), Pennsylvania (+5,530), Kentucky (+4,745), and Massachusetts (+4,330), while the largest decreases were in California (-11,789), West Virginia (-473), Florida (-450), Arizona (-192) and South Dakota (-186).
Hear Mark Lieberman Friday on P.O.T.U.S. Radio, Sirius-XM 124, at 8:45 a.m. Eastern time.
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