Ho hum: Continued Claims for Unemployment Insurance Hit New Post-Recession Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 222,000 1st time claims for unemployment insurance for the week ended May 12 an INCREASE of 11.000 from the prior week’s unrevised report;
  • The four-week moving average of first-time claims FELL 2,750 to 213,250;
  • Four-week moving average represented 0.137 percent of employment, DOWN from 0.139 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,707,000 for the week ended May 5, DOWN 87,000 from the previous week’s UPWARDLY REVISED 1,794,000;
  • The four-week moving average of continued claims FELL 39,750 to 1,773,750.

Trends:

  • The four-week moving average of initial claims for unemployment insurance fell to its lowest level since December 13, 1969 (210,750);
  • The number of continued claims for unemployment insurance was at its lowest level since December 1, 1973 (1,692,000)
  • The four-week moving average of continued claims fell again to its lowest level since December 22, 1973 (1,756,000);
  • The Four-week moving average of continued claims has fallen in 12 of the last 14 weeks dropping more than 160,000 in that span;
  • The four-week moving average of initial claims has fallen for four weeks in a row.

Data Source: Department of Labor

Image result for unemployment insurance claims

By any measure, despite the blip up in this week’s report, claims for unemployment insurance are showing unparalleled improvement which belies the trend in earnings which have not improved in synch.

The report which does match up quite nicely with the weekly claims data is the Job Openings and Labor Turnover Survey (JOLTS) showing as it does a sharp increase in the ratio of quits to layoffs/discharges, 2.14, highest ever, in the most recent JOLTS report (for March). The ratio is another indicator of market strength, with more workers willing to quit with the confidence in their ability to land another job. Of course, those “quits” are not without cost as new workers must be trained to replace those who’ve left and the replacements will take some time to get up to speed and likely be less productive in the near term.

That, of course, argues for a bump in earnings as a retention tool but employers too are affected by the market knowing they will easily be able to replace departing employees or at least temporarily take advantage of the savings in wages.

The low levels of unemployment insurance claims have also given state unemployment insurance trust funds – from which benefits are actually paid – an opportunity to recover from the Recession when states had to borrow from the federal government to maintain unemployment insurance payouts.

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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