Unemployment insurance Claims Fall Back but Hiring Backlog Persists

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 204,000 1st-time claims for unemployment insurance for the week ended January 11, 2020, a DECLINE of 10,000from the previous week’s unrevised 214,000;
  • The four-week moving average of initial claims FELL 7,750 to 224,000;
  • Four-week moving average represented 0.136 percent of employment, DOWN from 0.141 percent one week earlier;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,767,000 for the week ended January 4, DOWN 37,000 from the previous week’s UPWARDLY REVISED 1,804,000 (from 1,803,000)
  • The four-week moving average of continued claims ROSE 10,500 to 1,755,500.

Trends:

  • The number of first-time claims for unemployment insurance fell for the fifth straight week for the first time since last March-April;
  • The four-week moving average of continued claims for unemployment insurance rose for the fifth straight week and has increased for 13 of the last 15 weeks;
  • The four-week moving average of continued claims rose to its highest level since last March

Data Source: Department of Labor

Image result for unemployment depression

The pathway from employment to a new job remains clogged according to data from the Labor Department on continued claims for unemployment insurance, suggesting a continued mismatch between available jobs and the newly unemployed.

The increase in the four-week moving average of continued claims represents the backlog in the number of individuals unable to escape from unemployment rolls by getting a new job. Indeed, the data are consistent with statistics in the monthly Employment Situation showing a steady decline in the number of “re-entrants” to the labor force (from unemployment rolls). Since January, the number of re-entrants to the labor force has dropped almost 16 percent and last month represented 28.9 percent of the total number of persons unemployed, down from 31.3 percent a year earlier.

The data suggest strongly unemployed individuals are unable to requalify for the jobs they once had.

The statistics are like those in the monthly Job Openings and Labor Turnover Survey which have been showing gaps between job openings and hires in the same industries.

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. 7

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