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First-Time Unemployment Claims Average Hits 5-Year Low

First-time claims for unemployment insurance continued to move sideways, dropping 5,000 to 366,000 for the week ending February 2, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/020713.asp reported Thursday.


The report on claims filed for the week ending January 26 was revised up to 371,000 from the originally reported 368,000.

The four-week moving average for first time claims fell 2,250 to 350,000--the lowest level since March 2008, a strong signal of an improving labor market.

Continuing claims--reported on a one-week lag--rose 8,000 for the week ended January 26 to 3,224,000 from 3,216,000. Continuing claims for the week ending January 19 were revised up from the originally reported 3,197,000. The continuing claims data series tracks the number of longer term unemployed who qualify for regular state jobless benefits. The four-week average for continuing claims rose 13,750 to 3,211,000.

Continuing claims have increased in three of the four weeks this year, up a net 55,000. The 1.7 percent increase since year-end signals a continuing tight labor market with minimal hiring or job creation.

Claims reports at the beginning of a year are highly volatile, with seasonal adjustments moving in a wide range to attempt to normalize for layoffs, which typically occur in the beginning of a year in industries that staff up at year-end.

The raw data showed claims, unadjusted, rose 16,696 for the week ending February 2.

The week-over-week drop in seasonally adjusted first-time claims was moderate compared with the wide swing in [COLUMN_BREAK]

weekly numbers in January. Initial jobless claims jumped 41,000 in the week ending January 26 and falling 40,000 two weeks earlier.

According to a Labor Department of state-by-state comments on the industry breakdown of layoffs, there were fewer construction sector layoffs in Illinois and Florida in the week ended January 26, but more layoffs in that sector in North Carolina. Five states--Florida, Georgia, New Jersey, Ohio and South Carolina--reported fewer manufacturing layoffs than one week earlier.

The total number of people claiming benefits in all programs for the week ending January 19 was 5,590,480, a decrease of 326,513 from the previous week. There were 7,663,608 persons claiming benefits in all programs in the comparable week in 2012.

According to the Bureau of Labor Statistics, 12,332,000 persons were officially considered unemployed in January, which means that of those individuals counted as unemployed, 6.74 million were not receiving any form of government unemployment insurance, up from 6.33 million one week earlier.

The Labor Department said states reported 1,826,098 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending January 19, a decrease of 288,471 from the prior week. There were 2,985,907 persons claiming EUC in the comparable week in 2012.

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 February 5, 23 states had borrowed a total of $28.3 billion. One week earlier, 28 states had an aggregate $28.3 billion in outstanding loans to cover shortfalls. California accounted for 37.4 percent of the borrowing.

According to the Labor Department detail, also reported on a one-week lag largest increases in initial claims for the week ending January 26 were in North Carolina (+2,030), Oregon (+491), Virginia (+461), and Vermont (+62), while the largest decreases were in California (-20,414), Texas (-5,082), Illinois (-4,865), Florida (-3,570), and Michigan (-2,795).

_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 a.m. and again at 9:40 a.m. Eastern time._

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.

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