1st Time Unemployment Claims Continue Down

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 212,000 1st time claims for unemployment insurance for the week ended Aug 11 a DECREASE of 2.000 from the prior week’s upwardly revised report (from 213,000 to 214,000)
  • The four-week moving average of first-time claims ROSE 1,00 to 215,500;
  • Four-week,  moving average represented 0.138 percent of employment, UNCHANGED from the previous week;
  • The number of continued claims – individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,721,000 for the week ended August 4, DOWN 39,000 from the previous week’s UPWARDLY REVISED 1,760,000 (revised from 1,755,000);
  • The four-week moving average of continued claims FELL 8,000 to 1,735,500.

Trends:

  • Four-week moving average of initial claims ROSE for the first time in six weeks;
  • The four-week moving average of first-time claims has declined year-year for 44 straight weeks;

Data Source: Department of Labor

Image result for unemployment

Initial claims for unemployment insurance continued their downward roller coaster ride last week and over a longer period, be it four weeks or 52, look positively bullish.

Whether measured as a percentage of employment or the labor force, initial claims filings have maintained a downward trajectory.

The four-week moving average of first-time claims has been down year-year four 47 weeks and the 52-week moving average has been down for 21 straight weeks.

The picture is largely the same for continued claims, a measure of hiring. The four-week moving average has been down year-year every week since January 2010!

What continues to befuddle labor economists is the stubborn nature of weekly earnings which seem to have defied laws of supply and demand, not rising dramatically even as the unemployment and the number of unemployed drops.

One possible explanation is the cut in the corporate tax rate which has removed some of the tax incentive for paying workers more.

When the corporate tax rate was 35 percent, businesses knew the government would essentially “pay” 35¢ of every additional dollar of wages. Now that the rate is 21 percent, the tax advantage is reduced. While employers have not offered that excuse or logic (?), it has affected other facets of the economy, for example, low-income housing tax credits which, with the reduction in the corporate tax rate are no longer as valuable.

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.

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