Washington, D.C., USA : The number of individuals who filed for unemployment insurance for the first time (Initial claims) during the week ended September 15 was a seasonally adjusted 201,000, , a decrease of 3,000 from the previous week’s unrevised level of 204,000, the U.S. Department of Labor said Thursday in it’s Unemployment Insurance Weekly Claims Report.
The consensus forecast from economists had expected total new claims of 210000 in the past week.
This is the lowest level for initial claims since November 15, 1969 when it was 197,000. The 4-week moving average was 205,750, a decrease of 2,250 from the previous week’s unrevised average of 208,000. This is the lowest level for this average since December 6, 1969 when it was 204,500.
The decline in applications suggests that the September payrolls report may show another solid gain. The claims data, covering the week containing the 12th of the month, coincide with the reference period for the Labor Department’s survey for the monthly figures. Businesses are holding on to existing staff — besides adding new employees — amid a shortage of skilled workers.
The weekly figures may experience a temporary jump in coming weeks as damage and flooding from Hurricane Florence in the Carolinas disrupt economic activity. That would follow the pattern from previous major storms, such as Harvey and Irma in 2017.
Seasonally adjusted initial claims data
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending September 8, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending September 8 was 1,645,000, a decrease of 55,000 from the previous week’s revised level.
This is the lowest level for insured unemployment since August 4, 1973 when it was 1,633,000. The previous week’s level was revised up 4,000 from 1,696,000 to 1,700,000. The 4-week moving average was 1,691,500, a decrease of 20,750 from the previous week’s revised average. This is the lowest level for this average since November 17, 1973 when it was 1,686,000. The previous week’s average was revised up by 1,000 from 1,711,250 to 1,712,250.
Unadjusted initial claims data
The advance number of actual initial claims under state programs, unadjusted, totaled 168,801 in the week ending September 15, an increase of 6,468 (or +4.0 percent) from the previous week. The seasonal factors had expected an increase of 8,780 (or +5.4 percent) from the previous week. There were 212,313 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.0 percent during the week ending September 8, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 1,460,796, a decrease of 35,122 (or -2.3 percent) from the preceding week. The seasonal factors had expected an increase of 13,599 (or +0.9 percent) from the previous week. A year earlier the rate was 1.2 percent and the volume was 1,738,986
The total number of people claiming benefits in all programs for the week ending September 1 was 1,519,707, a decrease of 105,019 from the previous week. There were 1,728,067 persons claiming benefits in all programs in the comparable week in 2017.
No state was triggered “on” the Extended Benefits program during the week ending September 1.
Initial claims for UI benefits filed by former Federal civilian employees totaled 611 in the week ending September 8, an increase of 68 from the prior week. There were 587 initial claims filed by newly discharged veterans, a decrease of 9 from the preceding week.
There were 7,197 former Federal civilian employees claiming UI benefits for the week ending September 1, a decrease of 313 from the previous week. Newly discharged veterans claiming benefits totaled 7,332, a decrease of 97 from the prior week.
The highest insured unemployment rates in the week ending September 1 were in New Jersey (2.4), Connecticut (1.9), Alaska (1.7), Pennsylvania (1.7), Puerto Rico (1.7), California (1.6), New York (1.5), Rhode Island (1.5), the District of Columbia (1.4), Massachusetts (1.4), and Nevada (1.4).
The largest increases in initial claims for the week ending September 8 were in Iowa (+648), Wisconsin (+643), Kansas (+573), Michigan (+398), and Nebraska (+302), while the largest decreases were in California (-4,065), New York (-3,765), Pennsylvania (-948), Indiana (-812), and Washington (-623).
Why Markets Care About Unemployment Insurance Weekly Claims
Unemployment Insurance Weekly Claims – also called Jobless Claims or Initial Claims – measures the number of individuals who filed for unemployment insurance for the first time during the past week.
Unemployment Insurance Weekly Claims is the nation’s earliest economic data. The market impact fluctuates from week to week – there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes.
The usual effect is that if ‘Actual’ is less than ‘Forecast’, it is good for the dollar and vice versa.
Markets care because although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health since consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy.
An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility.
Continued Weeks Claimed
A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. Continued claims are also referred to as insured unemployment. The count of U.S. continued weeks claimed is also a good indicator of labor market conditions.
Continued claims reflect the current number of insured unemployed workers filing for UI benefits in the nation. While continued claims are not a leading indicator (they roughly coincide with economic cycles at their peaks and lag at cycle troughs), they provide confirming evidence of the direction of the U.S. economy
Seasonal Adjustments and Annual Revisions
Over the course of a year, the weekly changes in the levels of initial claims and continued claims undergo regularly occurring fluctuations. These fluctuations may result from seasonal changes in weather, major holidays, the opening and closing of schools, or other similar events. Because these seasonal events follow a more or less regular pattern each year, their influence on the level of a series can be tempered by adjusting for regular seasonal variation. These adjustments make trend and cycle developments easier to spot. At the beginning of each calendar year, the Bureau of Labor Statistics provides the Employment and Training Administration (ETA) with a set of seasonal factors to apply to the unadjusted data during that year. Concurrent with the implementation and release of the new seasonal factors, ETA incorporates revisions to the UI claims historical series caused by updates to the unadjusted data.