Unemployment: Initial Claims Down, Continuing Claims at Record High

The latest figures on claims for unemployment insurance in the United States were released this morning. The data showed Initial claims of 565,000, putting the figure under 600,000 for the first time since January. But, continuing claims rose to a record high of 6.88 million.

On the whole, this should be considered a very good weekly report as it indicates the levels of initial claims have dropped substantially from peak levels a few months ago.

I should note that unadjusted weekly initial claims have been under 600,000 for 13 weeks now. However, because of seasonal factors, we have not seen as marked a decline in the seasonally-adjusted data until now. The 4-week average for the unadjusted numbers is now less than 200,000 above levels of last year. The same downward trend is evident in the seasonally adjusted year-over-year comparisons and in the adjusted and unadjusted continuing claims comparisons despite the latest week’s rise.

In fact, even though the seasonally-adjusted continuing claims number is at a record high, having risen 159,000 in the most recent week, the unadjusted number dropped by 35,000 in that same week. Clearly, seasonal factors are at play here. My overall take here is pretty much the same: the employment market is still weak.

However, the trend in unemployment claims in the United States is clearly down. Since, this downward movement is slow, expect a weaker jobless recovery in which the unemployment rate continues to rise into double digits.

Comments

[commoinsens...:]

On the whole this should be considered very good? Are you high Ed? It means another half a million are unemployed. 150k people get added to the work force every month and were losing half a milillion a month and that;s good? you need to get out more.

Jul 09 11:09 AM

[John Galt:]

I'd rather see these numbers as a percentage of the work force.

At some point when 6 million people lose their job, a "drop" to below 600K might be a lower head count, but that doesn't take in consideration all of the people that already lost their jobs and the size of the work force.

If I have a factory with 100 workers and I have a mass lay off with 50 of them (50%), then the next month I lay off 10 workers ( 20%) and then the next month I lay off 8 workers ( 20%) of remaining workers... Is the situation really getting better?

What I really want to see is more jobs added, not "losing jobs at a slower rate".

Jul 09 11:11 AM

[thiazole:]

We aren't really at "record highs". The data you published shows this if you look closely. The previous week the nonadjusted numbers were higher and the week before that, they were even higher. While seasonally adjusting weekly changes makes sense, the total claims shouldn't be seasonally adjusted, especially in the middle of a recession. It skews the numbers dramatically.

For the other posters above who said things like "It means another half a million are unemployed." Please do your research on how the unemployment claims data is interpreted before you make such statements. During the good times, we still saw 300-350,000 new initial claims every week. That doesn't mean that we "lost" that many jobs.

Jul 09 11:31 AM

[kruser53:]

Yes, the numbers are better, but I can't cheer. A year ago 500,000 weekly initial claims would have been considered disastrous. That reduces my enthusiasm about the drop to 565,000.

Jul 09 12:06 PM

[Mad Hedge F...:]

Not good. There’s another great Chart of the Day from Clusterstock showing that we have fallen back to 2000 levels of total employment. Only one out of 2.4 Americans now has a job. Stocks, real estate, and many other asset classes have also given up the decade’s gains. In the meantime, the US population has grown by 26 million to 307 million. Has the 21st century happen yet?

Jul 09 03:53 PM

[Fighting Yoda:]

The intitail claims data was distorted due to seasonal auto claims:
"A Labor Department official said that there had been far fewer automotive and other manufacturing layoffs last week than anticipated on the basis of past experience of claims over July, when many plants are commonly idled."

All in all the slide continues - another 4-500K number ahead for job losses this month.

Jul 09 05:54 PM