Bolstered by favorable seasonal adjustment factors, first-time claims for unemployment insurance dropped 27,000 to 341,000 for the week ending February 9, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/021413.asp reported Thursday. Economists expected a much smaller decline to 360,000.[IMAGE]
Initial claims were under 350,000--a dividing line between a strong and weak labor market--for the third time in the last five weeks, hinting layoff activity has returned to normal. During the long economic expansion between the end of the 1990-91 recession and the beginning of the 2001 recession, initial claims for unemployment insurance averaged 345,000 per week, dipping as low as 259,000.
The four-week moving average of first-time claims, still affected by a spike in claims two weeks ago when holiday workers were laid off, rose 1,500 to 352,500. The Labor Department applies adjustment factors, which vary from week to week to account for exogenous events that historically affect claim filings.
Continuing claims (reported on a one-week lag) fell sharply, dropping 130,000 to 3,114,000--the lowest level since July 2008, when continuing claims fell as low as 3,113,000 before beginning a steep upward climb. Continuing claims for the week ending January 26 were revised up to 3,244,000 from the originally reported 3,224,000. The continuing claims data series tracks the number of longer-term unemployed who qualify for regular state jobless benefits and often shows large movements, depending on first-time claims 26 weeks earlier and legislative changes to state unemployment programs. The four-week average for continuing claims fell 28,750 to 3,187,250, also the lowest level since July 2008.
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 that typically [COLUMN_BREAK]
occur in the beginning of a year in industries that staff up at year-end. In addition, reports are affected by holidays, which delay processing of claims filed electronically.
According to a Labor Department brief of state-by-state comments on the industry breakdown of layoffs, states with relatively large drops in initial claims had fewer construction industry layoffs, while retail cuts affected states that had relatively high increases in first-time claims.
The total number of people claiming benefits in all programs for the week ending January 26 was 5,918,156, an increase of 327,676 from the previous week. There were 7,681,411 persons claiming benefits in all programs in the comparable week in 2012.
According to the Bureau of Labor Statistics (BLS), 12,332,000 persons were officially considered unemployed in January, which means that of those individuals counted as unemployed, 6.41 million were not receiving any form of government unemployment insurance, down from 6.74 million one week earlier.
The Labor Department said states reported 2,081,356 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending January 26, an increase of 255,258 from the prior week. There were 3,002,475 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 12, 23 states had borrowed a total of $28.1 billion. One week earlier, 23 states had an aggregate $28.1 billion in outstanding loans to cover shortfalls. Five states--California, Indiana, New York, North Carolina and Ohio--owe more than $1 billion, which may require higher unemployment premiums or special assessments on employers in those states.
According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending February 2 were in California (+11,784), Texas (+2,071), New York (+2,066), Florida (+2,050), and Oregon (+1,603), while the largest decreases were in North Carolina (-2,681), Tennessee (-2,003), Alabama (-1,248), Michigan (-1,011), and Connecticut (-676).
_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._