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First-Time Jobless Claims Drop to 350k, Near 2012 Low

First time claims for unemployment insurance dropped 12,000 to 350,000 for the week ended December 22, the third lowest level of the year, the ""Labor Department"":http://www.ows.doleta.gov/press/2012/122712.asp reported Thursday. Economists expected claims to increase to 365,000.

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The previous week's report was revised upward to 362,000 from the originally reported 361,000.

Continuing claims ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô reported on a one-week lag ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô also decreased, 32,000 to 3,206,000 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the second lowest level of the year -- for the week ended December 15. The previous week's initial report of 3,225,000 continuing claims was revised upward to 3,238,000. The continuing claims data series tracks the number of longer term unemployed who qualify for regular state jobless benefits.

Initial claims filings dropped to 350,000 or below only two other times this year: there were 342,000 claims for the week ended October 6 and 344,000 for the week ended December 8. There were 3,174,000 continuing claims reported for the week ended October 27 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô just ahead of Superstorm Sandy.

350,000 initial claims are considered the tipping point between an improving or deteriorating job market.

This week's report was the final report for the reference week used by the Bureau of Labor Statistics to develop the monthly employment situation report including the unemployment rate. Month-month comparisons of the jobless claims ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô both new and continuing ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô are complicated though by Hurricane Sandy which caused a spike in both data series. The BLS report will be released on January 4.

That said, both the number of first time claims and continuing claims, dropped from mid-month to mid-month -- as did and the smoothing four-week moving averages for both -- suggesting that the surge in storm-related layoffs has passed.

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Unemployment claims data for the next few weeks will be erratic because of intervening holidays. Although claims themselves can be submitted electronically, processing will be delayed as state offices are closed.

The total number of people claiming benefits in all programs for the week ending December 8 was 5,475,708, an increase of 73,279 from the previous week. There were 7,231,771 persons claiming benefits in all programs in the comparable week in 2011, according to the report.

The Labor Department said states 2,100,243 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending December 8, an increase of 3,698 from the prior week. There were 2,926,135 persons claiming EUC in the comparable week in 2011. EUC weekly claims include first, second, third, and fourth tier activity. Extended Benefits were only available in New York during the week ending December 8. There were 44,610 persons claiming emergency benefits during the week ended December 8 compared with 571,878 in the comparable week in 2011.

Both the extended and emergency benefit programs are tied up in the ongoing ""fiscal cliff"" negotiations and would expire next Tuesday without congressional action.

According to the BLS, unemployment was 12,029,000 in November which means that of those individuals counted as unemployed, 6.81 million were not receiving any form of government unemployment insurance, up from 6.39 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 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô unless Congress intervenes ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of December 24, 20 states have an aggregate $26.9 billion in outstanding loans to cover shortfalls, up from $26.7 billion one week earlier. California accounted for 37.7 percent of the borrowing.

According to the Labor Department detail, also reported on a one-week lag the largest increases in initial claims for the week ending December 8 were in California (+5,952), Florida (+749), Ohio (+743), Rhode Island (+197), and Colorado (+161), while the largest decreases were in New York (-11,295), Pennsylvania (-11,247), North Carolina (-8,564), Wisconsin (-5,726) and Georgia (-5,317).

_Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 am and again at 9:40 eastern time._

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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