First-time claims for unemployment insurance rose for the third time in the last four weeks, increasing 10,000 to 354,000 for the week ending May 25, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/053013.asp reported Thursday.[IMAGE]
Economists expected initial claims to remain at 340,000 as originally reported for the week ended May 18. That report was revised up to 344,000.
The number of persons continuing to collect unemployment insurance for the week ending May 18, reported on a one week lag, also increased, rising 63,000 to 2,986,000. Continuing claims for the week ending May 11 were revised up to 2,923,000 from the originally reported 2,912,000.
The four-week moving average of initial claims rose 6,750 to 347,250--the third straight weekly increase. The four-week moving average of continuing claims fell 11,500 to 2,986,500, the lowest level since May 2008. Continuing claims have been affected by the ongoing federal budget sequester.
As a result of the sequestration cuts to unemployment programs (most of which kicked in at the end of March) the four-week moving average of continuing claims has fallen for six straight weeks, with an average drop of just over 17,000. The four-week moving average was 3,093,000 at the beginning of April.
Comparative and trend data for continuing claims are becoming increasingly less reliable as sequester cuts affect the numbers. Some states are reducing the number of weeks of payments, while others are cutting payments themselves.
Initial claims for the week ending May 25 were affected in part by low seasonal adjustment factors that inflate the raw data. Even on an unadjusted basis, claims rose by 13,653, suggesting employers are continuing to reduce payrolls despite what appears to be a recovery.
The reported increase followed on a report of improving consumer confidence, a survey usually affected by employment trends. The confidence survey, though, was completed before the week covered by the unemployment claims data.
This week's data on initial claims will have no impact on the Employment Situation report for May to be released by the Bureau of Labor Statistics (BLS) on June 7. That report is based on employment and payrolls for the calendar week including the 12th day of the month. From mid-April to mid-May, first-time claims dropped 11,000, and the four-week moving average fell 21,500, suggesting layoffs will not be a drag on payroll numbers for May.
The Labor Department said the total number of people claiming benefits in all programs for the week ending May 11 was 4,578,592, a decrease of 166,659 from the previous week. There were 6,138,246 persons claiming benefits in all programs in the comparable week in 2012. Extended Benefits were not available in any state during the week ending May 11.
According to the BLS, 11,659,000 persons were officially considered unemployed in April, with 4.35 million ""long-term"" unemployed--that is, out of work for at least 27 weeks. Of those individuals counted as unemployed, 7.08 million were not receiving any form of government unemployment insurance for the week ending May 11, up from 6.91 million one week earlier.
The Labor Department also said states reported 1,726,659 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending May 11, a decrease of 50,027 from the prior week. There were 2,618,445 persons claiming EUC in the comparable week in 2012. EUC benefits this year are threatened by the federal budget sequester.
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 May 24, 22 states had borrowed a total of $21.2 billion. One week earlier, 22 states had an aggregate $21.4 billion in outstanding loans to cover shortfalls. Five states--California, Indiana, 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 May 18 were in South Carolina (+1,263), Tennessee (+1,191), Missouri (+785), Michigan (+634), and Massachusetts (+610), while the largest decreases were in California (-16,334), Georgia (-1,802), Illinois (-1,198), Kentucky (-902), and Ohio (-623).
_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 a.m. Eastern._