Initial Claims for Unemployment Insurance Dip; Trend Remains Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 232,000 1st time claims for unemployment insurance for the week ended April 14 a DECREASE of 1,000 from the prior week;
  • The number of initial claims for the week ended March 31 was UNCHANGED at 233,000;
  • The four-week moving average of first-time claims ROSE 1,250 to 231,250;
  • Four-week moving average represented 0.149 percent of employment, UP from 0.148 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,863,000 for the week ended April 7, DOWN 15,000 from the previous week’s UPWARDLY REVISED 1,878,000;

Trends:

  • The graph used in the Labor Department’s press release showed the four-week moving average of initial claims to be essentially flat over the last year except for an upward spike during last year’s hurricane season;
  • The number of first time claims for unemployment insurance remained below 250,000 for the 14th straight week. [350,000 is considered by labor economists to be the “tipping point” between a robust and weak labor market.]
  • As an indicator of the employment situation report for April (to be issued May 4), the data show first time claims rose 5,000 from mid-March to mid-April and the four-week moving average rose 8,000 in that span, both suggesting unemployment increased dashing hopes for a further decline in the unemployment rate.

Data Source: Department of Labor 

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We’ve yet to see any impact on unemployment from the higher tariffs announced by President Trump but layoffs in steel and aluminum dependent manufacturing could be offset by increased hiring at the retail level or, if as the President expects, new companies open to fill supply needs. According to a new research study by the New York Fed, the “25 percent steel tariff is likely to cost more jobs than it saves.”

The study looked at, among other things, the steel tariffs of up to 30 percent imposed during George W. Bush’s administration in 2002 and a 35 percent tariff imposed on Chinese tires in 2009 by the Obama Administration. Estimates of job losses from the Bush-era tariffs ranged as high as 200,000 (more than the 187,500 workers employed in the industry at the time). In response to the tariffs on tires, the researchers said, China imposed restrictions on U.S. shipments of chicken parts which cost chicken producers about $1 billion in sales in 2011.

The labor market has been one of the highlights of the Trump Administration but how much of it is momentum from the final Obama years and how much is attributable to Trump is hard to determine.

We do know if employment starts to tank, the White House bear the brunt of the blame.

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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