1st-time Unemployment Insurance Claims Fall but Continued Claims Increase

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 210,000 1st-time claims for unemployment insurance for the week ended October 5, 2019, a DECLINE of10,000from the previous week’s upwardly revised 220,000 (from 219,000);
  • The four-week moving average of initial claims ROSE 1,000 to 213,750;
  • Four-week moving average represented 0.136 percent of employment, UNCHANGED from one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,684,000 for the week ended September 28, UP 29,000 from the previous week’s UPWARDLY REVISED 1,655,000 (from 1,651,000)
  • The four-week moving average of continued claims ROSE 2,500 to 1,665,000;

Trends:

  • The week-week drop in initial claims was the first in four weeks;
  • The increase in continued claims was the first in four weeks;
  • The increase in the four-week moving average of continued claims was the first in four weeks.

Data Source: Department of Labor

Image result for unemployment

The upbeat report of initial claims for unemployment insurance followed by a day a somewhat disappointing report on job openings.

To be sure the two reports – despite the timing different (the Job Openings and Labor Turnover Survey report was for August and the report on unemployment insurance claims was for the week ended October 5 – could be linked.

The drop in job openings – a 1.7 percent month-month decline – suggests employers might be optimally staffed, thus producing fewer layoffs with fewer individuals seeking unemployment insurance. Indeed, the total number of separations in August dropped 3.0 percent, almost matching the 3.3 percent dip in hires for the month. The number of job openings fell 1.7 percent from the end of July to the end of August explaining the weaker than expected increase in jobs in September.

And that weakness, the unemployment claims report suggest, is likely to continue with fewer layoffs, leaving employers with few openings to fill. A couple of other ratios suggest that as well: the number of job openings per unemployed, according to the JOLTS data, dipped slightly in August and the ratio of quits to layoffs dipped as well.

The openings-to-unemployed measure reflects declines in both datasets, underscoring a desire by employers to retain knowledgeable staff. The ratio of quits to layoffs, primarily due to a lower number of “quits” suggests an acknowledgment of a somewhat tight labor market.

The increase in continued claims supports that interpretation with fewer individuals currently collecting unemployment insurance able to find jobs.

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

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