First-Time Jobless Filings Continue Down

First-time claims for unemployment insurance fell to 334,000 for week ending June 8, dropping 12,000 after decreasing 11,000 one week earlier, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/061313.asp reported Thursday.

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Economists expected initial claims to increase to 350,000 from the prior week. Claims filings for the week ending June 1 remained at the originally reported 346,000.

The number of persons continuing to collect unemployment insurance for the week ending June 1, reported on a one-week lag, increased 2,000 to 2,973,000. The prior week's original report of 2,952,000 original claims was revised up to 2,971,000.

Initial claims filings have now fallen for three of the last four weeks after increasing for two weeks in a row early last month, the first consecutive weekly increase since March.

The four-week moving average of initial claims fell for the first time in five weeks, down 7,250 to 345,250. The four-week moving average of continuing claims fell 12,750 to 2,967,250, the lowest level since May 2008.

Continuing claims have been falling in part due to the ongoing federal budget sequester but also with increased hiring. In its Job Openings and Labor Turnover Survey (JOLTS) report earlier this week, the Bureau of Labor Statistics (BLS) showed hiring in the first four months of the year was up from the same period in 2012 (17,401,000 compared with 17,368,000).

The JOLTS report also showed number of ""layoffs and discharges"" was down 427,000 from the first four months of 2012.

Though continuing claims data still reflects the impact of sequestration cuts that led to some states reducing the number of weeks out-of-work individuals can receive benefits, the primary driver for the favorable trend in unemployment claims filings appears to be hiring in anticipation of summer tourism. The Employment Situation report for May, released last week by BLS, showed increased hiring in the retail and leisure and hospitality sectors, particularly food service jobs.

As a result of the sequester impact, though, comparative and trend data for continuing claims are becoming increasingly less reliable, with improvement in that data series as likely to come from increased hiring as changes in the unemployment insurance programs.

The initial claims data shrugged off two factors that could have led to an increase in claims: a backlog in processing claims filed for the holiday-shortened week ending June 1 and less favorable seasonable adjustment factors, which are developed to account for known impacts on data.

This week's data on initial claims will have no impact on the Employment Situation report for June, to be released by the Bureau of Labor Statistics on July 5. That report is based on employment and payrolls for the calendar week including the 12th day of the month.

The Labor Department said the total number of people claiming benefits in all programs for the week ending May 25 was 4,515,445, a decrease of 129,863 from the previous week. There were 5,827,210 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 25.

According to the BLS, 11,760,000 persons were officially considered unemployed in May, with 4,357,000 ""long-term"" unemployed--that is, out of work for at least 27 weeks. Of those individuals counted as unemployed, 7.24 million were not receiving any form of government unemployment insurance for the week ended May 25, down from 7.01 million one week earlier.

The Labor Department also said states reported 1,703,458 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending May 25, a decrease of 57,135 from the prior week. There were 2,551,539 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 June 11, 22 states had borrowed a total of $21.1 billion. One week earlier, 22 states also had an aggregate $21.2 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 June 1 were in Tennessee (+1,280), New York (+1,001), Oregon (+851), Montana (+501), and North Carolina (+302), while the largest decreases were in California (-8,796), Florida (-3,250), Pennsylvania (-1,923), Texas (-1,876), and Missouri (-1,704).

_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, Friday at 6:45 a.m. Eastern._