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First-Time Jobless Claims Plunge to 5-Year Low

First-time claims for unemployment insurance plunged 37,000 for the week ending January 12 to 335,000, the lowest level since January 2008, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/011713.asp reported Thursday. Economists expected claims to drop to 368,000 from the prior week.

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The previous week's report was revised upward to 372,000 from the originally reported 371,000.

The weekly drop in claims was the steepest since February 2010, but volatility at the beginning of a year is not unusual as companies shed workers who had been added to meet a hoped-for flurry of holiday-related activity. In the equivalent week in 2012, claims dropped 26,000.

Continuing claims--reported on a one-week lag--rose 87,000 for the week ended January 5 to 3,214,000 after dropping 109,000 the week before. The previous week's initial report of 3,109,000 continuing claims was revised upward to 3,127,000. The continuing claims data series tracks the number of longer term unemployed who qualify for regular state jobless benefits. The sharp drop in continuing claims reflected both a relatively steep decline in first time claims since months ago and that fewer states qualify for emergency benefits.

The total number of people claiming benefits in all programs for the week ending December 29 was 5,821,966, an increase of 465,547 from the previous week. There were 7,826,846 persons claiming benefits in all programs in the comparable week in 2011.

The Labor Department said states reported 2,059,438 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending December 29, an increase of 67,984 from the prior week. There were 3,026,855 persons claiming EUC in the comparable week in 2011.

Both the extended and emergency benefit programs were tied up in the ""fiscal cliff"" negotiations.

According to the Bureau of Labor Statistics (BLS), 12,248,000 persons were officially considered unemployed in December, which means that of those individuals counted as unemployed, 6.46 million were not receiving any form of government unemployment insurance, down from 6.89 million one week earlier.

States continue to borrow from the federal government to cover shortfalls in those funds which will eventually have to be repaid--unless Congress intervenes--with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of January 15, 22 states--up from 21 states one week earlier--have an aggregate $27.9 billion in outstanding loans to cover shortfalls, up from $27.4 billion one week earlier. California accounted for 37.8 percent of the borrowing.

According to the Labor Department detail, also reported on a one-week lag. the largest increases in initial claims for the week ending January 5 were in New York (+37,189), Georgia (+15,354), North Carolina (+13,606), California (+8,691), and Texas (+8,669), while the largest decreases were in Michigan (-12,536), New Jersey (-5,530), Oregon (-5,471), Ohio (-4,915), and Kentucky (4,257).

_Hear Mark Lieberman ever Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:40 a.m. Eastern time and at 9:40 a.m._

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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