1st-time and Continued Unemployment Insurance Return to “Normal” Range

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 209,000 1st-time claims for unemployment insurance for the week ended Aug 17, 2019, a DECREASE of12,000from the previous week’s upwardly revised 221,000 (from 220,000);
  • The four-week moving average of initial claims ROSE 500 to 214,500;
  • Four-week moving average represented 0.136 percent of employment, unchanged from the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,674,000 for the week ended August 10, DOWN 54,000 from the previous week’s upwardly REVISED 1,728,000 (from 1,726,000)
  • The four-week moving average of continued claims FELL 750 to 1,697,000;

Trends:

  • The week-week drop in continued claims (54,000) was the largest since the beginning of April;
  • From mid-July to mid-August, the number of initial claims fell 3.2 percent and the four-week moving average of first-time claims dropped 1.9 percent, both signaling a continued low unemployment rate for August in the September 6 Employment Situation release.

Data Source: Department of Labor

Image result for unemployment insurance claims

Not that anyone’s complaining, but the 2019 hurricane season has been the lightest since 1982, with no named storms for the July 15 – August 19 period. While that doesn’t mean hurricane watchers can rest easy (indeed it could be the calm before the storm with meteorologists noting the August 20 – September 11 period historically has the greatest increase in storms). Now what does this have to do with claims for unemployment insurance? A lot actually, as storms typically are followed by an increase (usually temporary) increase in unemployment insurance claims. Storms are one of the seasonal adjustment factors applied to the raw number of claims.

Weather analyses notwithstanding, the claims report for the week ended August 17 offered some positive signs for the August unemployment rate as both the number of first-time claims and the four-week moving of initial claims fell from mid-July to mid-August, suggesting a continued drop – or at least no increase – in the unemployment rate. The number of new payroll jobs may not follow the same pattern Jobs may be a different story as the more volatile measure of continued claims for unemployment insurance took a sharp jump a week ago. The number of continued claims Is seen as a surrogate for new jobs.

Job creation has been under pressure as a result of ongoing recession concerns as well as the uncertainty of the outcome of tariff negotiations.

You can hear Mark Lieberman every Friday at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

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