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Initial Unemployment Claims Drop But Remain Elevated

First time claims for unemployment insurance dipped to 370,000 for the week ended May 19 from the previous week's upwardly revised reading of 372,000 the ""Labor Department"":http://www.dol.gov/ reported Thursday.

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Economists had expected the report would show 371,000 initial claims.

The Labor Department had initially reported 370,000 claims filed for the week ended May 12. The revision turned that report to an increase of 2,000 from a previously report that filings were unchanged week-to-week.

Continuing claims ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô reported on a one-week lag ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô fell 29,000 to 3,260,000, down from an upwardly revised 3,289,000 one week earlier. The prior week's report had initially shown 3,265,000 continuing claims.

The drop in first-time claims was only the second in the last seven weeks.

Data in these reports are routinely revised - frequently higher. All but three of the 19 initial claims reports issued so far this year were revised upward one week later.

This week's report straddled the survey week used by the Bureau of Labor Statistics for the monthly Employment Situation report to be released on June 1, hinting at another month of slow job growth.

The Employment Situation report is based on data from the week of the month including the twelfth calendar day which fell at the end of the unemployment claims reporting week a week ago.

Although first time claims from fell from mid-April to mid-May, they remain elevated from data earlier in the year. In the last six weeks, initial claim filings have averaged 376,833 compared with 369,000 in the previous six weeks.

Initial claims remain above 350,000 which economists consider a tipping point between an expanding and contracting jobs market. First-time claims filings were last below 350,000 in March 2008.

Initial claims had been falling slowly but steadily since the beginning of 2011 but now appear to have settled in at a disappointing higher plateau.

The four-week moving average for initial claims fell to 370,000, a drop of 5,500, the third consecutive weekly decline. The four-week average for continuing claims dropped 17,250 to 3,271,500.

The total number of people collecting benefits under all unemployment insurance programs, reported on a two-week lag, fell 105,004 to 6,168,620. That tally reflects changes in unemployment insurance programs, capping the number of weeks benefits would be paid, enacted when Congress approved the extension of the payroll tax suspension. According to the latest BLS report, 12.5 million people were officially counted as unemployed.

States reported 2,630,507 persons claiming emergency unemployment compensation benefits for the week ending May 5, a decrease of 35,500 from the prior week, the Labor Department said. There were 3,411,860 claimants in the comparable week in 2011

According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending May 12 were in North Carolina (+1,956), Mississippi (+675), Tennessee (+474), Alabama (+428), and Florida (+373), while the largest decreases were in California (-3,478), New York (-3,094), Missouri (-2,111), Texas (-1,446), and Illinois (-1,316).

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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