By Mark Lieberman
Managing Director and Senior Economist
- 1st time claims for unemployment insurance for the week ended August 21 DECLINED for the third straight week, down 1,000 to 261,000, the lowest level in five weeks;
- The number of claim for the week ended August 14 was unrevised at 262,000
- Filings though remained under 300,000 for the 77th straight week, the longest streak since 1970;
- Four week moving average of first time claims DROPPED 1,250 to 264,000;
- The four week moving average represented 0.174 percent of total employment, DOWN from 0.175 percent one week earlier and from 0.182 percent one year ago;
- Continuing claims for the week ended August 14 FELL 30,000 to 2,145,000, largest week-week drop since the end of June;
- The number of continuing claims for the week ended August 7 was UNREVISED at 2,175,000;
- Four-week moving average of continuing claims INCREASED 250 to 2,155,250.
Though first-time claims for unemployment insurance declined – again – in the week ending August 21, that’s not the major takeaway from this week’s Labor Department report.
Initial (and continuing) claims for have been so low for so long it should come as no surprise even the slightest bump up, as experienced at the end of July, could have cautionary ripple effects.
That increase in first-time claims – a not insignificant 14,000 to a still low 266,000 continues to plague the data series’ four-week moving average with the result the four week moving average for the “reference week” used by the Bureau of Labor Statistics’ Employment Situation report is up about 6,250 from mid-July, a signal we might not see as robust an improvement in the labor market.
Not only is the four-week moving average of initial claims higher in mid-August than it was in mid-July, but so is the average for continuing claims, a rough surrogate for payroll employment.
The economy, in the last three months, added an average of 190,000 new jobs, even accounting for a paltry 24,000 increase in May.
The increase in the four-week moving average of continuing claims suggests job growth may have slowed somewhat in August. (The average increase in payrolls for June and July was 274,000.) One explanation could be found in a study by economists Pauline Leung of Cornell and Alexandre Mas from Princeton who found the ACA expansion of Medicaid had little impact on employment.
“If workers ‘locked’ into employment for insurance reasons perceive the Medicaid expansions to be temporary due to constitutional or implementation challenges, they may be reluctant to leave their jobs and employer-sponsored insurance coverage,” the authors hypothesized.
The employment “churning” would show up in the payroll report.
That said, the jobs report to be released next week (on the Friday before Labor Day) may not be as robust as recent reports
You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.