Sandy Cuts Jobless Claims

First-time claims for unemployment insurance fell 8,000 to 363,000 for the week ending November 3, the ""Labor Department"":http://www.ows.doleta.gov/press/2012/110812.asp reported Thursday. Economists expected 370,000 initial claim filings. It was the third straight weekly decline and the fifth drop in the last seven weeks.

The previous week's report was unchanged at 363,000, the first time a previous week's report has not been revised upward since April.

Continuing claims--reported on a one-week lag--fell a startling 135,000 to 3,127,000. The previous week's initial report of 3,263,000 continuing claims was revised down to 3,262,000. The continuing claims report tracks the number of longer-term unemployed who qualify for regular state jobless benefits.

This week's data report may have reflected the impact of the storm that ravaged the East Coast, shuttering government offices and systems that process new claims and generate unemployment insurance payments.

The drop in continuing claims--if not revised--would be the steepest since January 2011.

On a longer-range trend basis, the four-week moving average of initial claims increased 3,250 to 370,500, and the four-week moving average of continuing claims fell 38,500 to 3,227,750, its lowest level since July 2008.

The initial claims report has been unusually volatile for the last month, with wide swings in the seasonal adjustment factors used by the Labor Department to ""normalize"" the data. While this week's seasonally adjusted data showed a drop in first-time claims filings, the unadjusted data showed an increase.

The total number of people claiming benefits in all programs for the week ending October 20 was 5,077,231, an increase of 41,864 from the previous week. There were 6,835,604 persons claiming benefits in all programs in the comparable week in 2011. Extended benefits were only available in New York during the week ending October 20. According to the BLS, unemployment was 12,258,000 in October which means that of those individuals counted as unemployed, 718 million were not receiving any form of government unemployment insurance, up from 7.05 million one week earlier.

States have been borrowing 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 November 6, 20 states have an aggregate $26.1 billion in outstanding loans to cover shortfalls, down from $27.1 billion one week earlier. Absent Congressional action, interest on those loans could lead to states increasing contribution rates required from employers.

States reported 2,117,175 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending October 13, an increase of 18,529 from the prior week, the Labor Department said. There were 2,9453,824 persons claiming EUC 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 October 27 were in Oregon (+2,379), Indiana (+1,663), California (+1,139), Minnesota (+592), and Wisconsin (+589), while the largest decreases were in North Carolina (-3,782), Tennessee (-1,756), Maryland (-1,361), Florida (-1,141), and New Jersey (-1,080).