Thursday, December 08, 2011

Unemployment insurance claims decline again

The weekly unemployment insurance claims report was yet another welcome positive economic data point. The headline initial claims number was down "sharply" (-23K to 381K), although still a little too close to the traditional 400,000 recession threshold for much comfort. Continuing claims were down by a healthy amount, but we can't tell how much of that is simply due to people exhausting their benefits. Still, these were positive numbers. It is also worth noting that claims are well below the level of a year ago, so we are making real progress.
I wouldn't get too excited by these numbers since the seasonal adjustment is significant at this time of year. For example, actual, unadjusted initial claims were way up at 523K, although that is still well below the 585K level of a year ago. And continuing claims rose by 513K, although once again the level is well below that of a year ago.
Finally, although improvement in unemployment insurance claims is a very good thing, it actually doesn't tell us a lot about what is happening on the hiring front. Still, elevated unemployment claims have been a significant drag on the economy over the past couple of years, so improvement will be a positive factor for the economic outlook.


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