First-time claims for unemployment insurance for the week ending April 27 dropped 18,000 to 324,000, the lowest level in more than five years, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/050213.asp reported Thursday. Economists expected claims to increase to 354,000 initial claims. Initial jobless claims for the week ending April 20 were revised up to 344,000 from the originally reported 342,000.[IMAGE]
The number of filings was the lowest since the week ending January 19, 2008.
The number of persons continuing to collect unemployment insurance for the week ending April 20 (reported on a one week lag) rose 12,000 to 3,019,000. Continuing claims for the week ending April 13 were revised up to 3,007,000 from the originally reported 3,000,000.
The four-week moving average of initial claims fell 16,000 to 342,250. The four-week moving average of continuing claims fell 18,000 to 3,055,500.
The report will have no impact on the employment situation report to be issued Friday by the Bureau of Labor Statistics (BLS) detailing the number of payroll jobs and the unemployment rate for April. The BLS report will be based on data collected for the week including the 12th calendar day of the month.
From mid-March to mid-April, the moving average of first-time unemployment claims increased 14,000, and the four-week moving average rose 21,000, suggesting layoffs will be a drag on net new payroll jobs for April. For March, BLS reported the economy added a disappointing 88,000 payroll jobs.
Economists anticipate Friday's report will show gains of about 160,000 jobs with the unemployment rate unchanged at 7.6 percent.
The week-over-week decline in unemployment claims was the third in the last four weeks following three straight weekly increases.
The Labor Department offered no explanation for the sharp decline in claims or the downward trend that coincided with favorable seasonal adjustment factors.
The continuing claims data series is often the more significant series in forecasting the unemployment rate and payroll totals. Essentially, there are only three ways [COLUMN_BREAK]
to stop collecting unemployment insurance: if the individual gets a job, if benefits expire, or if the individual is no longer available to collect. From mid-March to mid-April, the continuing claims four-week moving average fell 4,250, which could suggest a more robust payroll report.
The total number of people claiming benefits in all programs for the week ending April 13 was 4,963,449, a decrease of 108,631 from the previous week, the Labor Department said. There were 6,597,715 persons claiming benefits in all programs in the comparable week in 2012.
The Labor Department said states reported 1,777,737 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending April 13, a decrease of 12,579 from the prior week. There were 2,724,432 persons claiming EUC in the comparable week in 2012.
EUC benefits are threatened by the federal budget sequester. Mississippi announced a cutback last week with a notice to recipients telling them to expect a 12.8 percent reduction in their weekly benefits.
Rich Hobbie, director of the National Association of State Workforce Agencies (state agencies which administer unemployment insurance programs) said in written testimony during a congressional hearing last month that 11 states might drop the EUC program entirely due to sequestration.
According to the BLS, 11,742,000 persons were officially considered unemployed in March, which means that of those individuals counted as unemployed, 6.78 million were not receiving any form of government unemployment insurance for the week ending April 13, up from 6.59 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 April 30, 24 states had borrowed a total of $28.6 billion. One week earlier, 23 states had an aggregate $29.9 billion in outstanding loans to cover shortfalls. Six states--California, Indiana, New Jersey, New York, North Carolina and Ohio--each 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 April 20 were in Michigan (+6,172), Massachusetts (+4,101), Connecticut (+2,452), Rhode Island (+1,427), and Nevada (+535), while the largest decreases were in California (-16,681), New York (-6,443), Pennsylvania (-3,646), Texas (-3,070), and Indiana (-1,637).
_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 8:45 a.m. and again at 1 p.m. Eastern._