First-time claims for unemployment insurance fell 41,000 to 410,000 for the week ending November 17, the ""Labor Department"":http://www.ows.doleta.gov/press/2012/112112.asp reported Wednesday. Economists expected 415,000 initial claims filings.[IMAGE]
The previous week's report was revised upward to 451,000 from the originally reported 439,000. In addition to the direct impact on businesses, Hurricane Sandy, which ripped through the East Coast on October 29, forced the closing of government offices that process claims filed by telephone or online.
Continuing claims--reported on a one-week lag--fell 30,000 to 3,337,000 after spiking up 193,000 one week earlier. The previous week's initial report of 3,334,000 continuing claims was revised upward to 3,367,000. The continuing claims report tracks the number of longer term unemployed who qualify for regular state jobless benefits.
On a longer-range trend basis, the four-week moving average of initial claims increased 9,500 to 396,250, and the four week moving average of continuing claims rose 19,500 to 3,285,000.
The Labor Department report, usually released on Thursday, was moved up by one day because of the Thanksgiving holiday. Although the report is revised regularly, the revision for this week's report could be affected by the shorter preparation time. Claims filings might also be affected next week by the holiday since although claims can be filed electronically, government workers will face a processing backlog due to a shorter workweek.
The volatile movement in both data sets resembled reports which followed Hurricane Katrina, which ravaged the Gulf Coast in 2005, and Hurricane Isaac, which hit the East Coast in August 2012, causing temporary spikes in filings for initial claims for unemployment insurance. While filings for first time claims should settle back, high levels of continuing claims could linger as businesses struggle to recover from the storm. Indeed, if individuals idled by the storm get other jobs, it could stall the storm recovery as businesses struggle to find experienced replacements.
In 2005, initial claims returned to trend about a month after Hurricane Katrina, but continuing claims remained elevated for nearly five months.
The recovery from Hurricane Isaac was faster, with continuing claims returning to trend in about a month.[COLUMN_BREAK]
Because of the timing of the other storms--at the end of the month rather than mid-month, when data used to calculate the unemployment rate is measured--neither Katrina nor Isaac had a significant impact on the unemployment rate.
This report covered the same week as the monthly employment situation report. From mid-October to mid-November, the number of initial unemployment insurance claims jumped 18,000--the largest mid-month to mid-month increase since June. For June, BLS reported a 29,000 increase in the number of individuals counted as unemployed and an 8.2 percent unemployment rate, unchanged from May. To be considered ""unemployed,"" an individual has to meet three criteria: They must be out of work, available for work, and looking for work.
While Sandy could have a muted on the unemployment rate, it could also show up in the jobs count, a separate survey conducted by the Bureau of Labor Statistics (BLS). The BLS report for November, to be released on December 7, will include survey data received by December 3. An individual who was paid for any part of the week including November 12 is counted as a job, but businesses shuttered by the storm may be too consumed by repairs to submit a voluntary response to the jobs survey.
The total number of people claiming benefits in all programs for the week ending November 3 was 5,241,296, an increase of 244,125 from the previous week. There were 6,728,664 persons claiming benefits in all programs in the comparable week in 2011. Extended Benefits were only available in New York during the week ending November 3.
According to the BLS, unemployment was 12,258,000 in October, which means that of those individuals counted as unemployed, 7.02 million were not receiving any form of government unemployment insurance, up from 7.28 million one week earlier.
States have been borrowing 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 November 19, 20 states have an aggregate $25.9 billion in outstanding loans to cover shortfalls, down from $26.01 billion one week earlier. Absent Congressional action, interest on those loans could lead to states increasing contribution rates required from employers.
The Labor Department said states reported 2,156,363 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending November 3, an increase of 60,758 from the prior week. There were 2,896,640 persons claiming EUC in the comparable week in 2011.
According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending November 10 were in New York (+43,956), New Jersey (+31,094), California (+24,693), Pennsylvania (+7,037), and Connecticut (+1,808), while the largest decreases were in Ohio (-4,996), Indiana (-877), Arkansas (-665), Massachusetts (-607), and Maryland (-576).