First-time claims for unemployment insurance for the week ended May 18 dropped 23,000 to, 340,000 from the highest level since the end of March the ""Labor Department"":http://www.ows.doleta.gov/press/2013/052313.asp reported Thursday.[IMAGE]
Economists expected initial claims to drop to 345,000. First-time jobless claims for the week ended May were revised up to 363,000 from the originally reported 360,000.
The number of persons continuing to collect unemployment insurance for the week ended May 11, reported on a one week lag, plunged 112,000 to 2,912,000, the lowest level since March 2008. The drop in continuing claims was the steepest week-over-week decline since November 2011. Continuing claims for the week ended May 4 were revised up to 3,024,000 from the originally reported 3,009,000.
The sharp drop in continuing claims followed cutbacks in extended unemployment benefit programs due to the federal budget sequestration.
The four-week moving average of initial claims fell by 500 to 339,500. The four-week moving average of continuing claims fell 23,750 to 2,995,250, the lowest level since May 2008.
As a result of the sequestration cuts to unemployment programs, most of which kicked in at the end of March, the four-week moving average of continuing claims has fallen for five straight weeks, with an average drop of almost 19,000. The four-week moving average was 3,093,000 at the beginning of April.
Comparative and trend data for continuing claims are becoming increasingly less reliable as sequester cuts affect the numbers. Some states are reducing the number of weeks of payments while others are cutting payments themselves.
The report on initial claims covered the same ""reference week"" used by the Bureau of Labor Statistics for its monthly Employment Situation report for May, to be released on June 7. From mid-April to mid-May, first-time claims dropped 15,000 and the four-week moving average fell 22,500, suggesting layoffs will not be a drag on payroll number for May.
The Labor Department said total number of people claiming benefits in all programs for the week ending May 4 was 4,745,266, a decrease of 98,540 from the previous week. There were 6,168,434 persons claiming benefits in all programs in the comparable week in 2012. Extended Benefits were available only in Alaska during the week ending May 4.
The Labor Department also said states reported 1,776,686 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending May 4, a decrease of 15,415 from the prior week. There were 2,630,544 persons claiming EUC in the comparable week in 2012.EUC benefits this year are threatened by the federal budget sequester.
According to the BLS, 11,659,000 persons were officially considered unemployed in April with 4.35 million ""long-term"" unemployed that is, out of work for at least 27 weeks. Of those individuals counted as unemployed,6.91 million were not receiving any form of government unemployment insurance for the week ended May 4, up from 6.82 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 Ã¢â‚¬" unless Congress intervenes Ã¢â‚¬" with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of May 21, 22 states had borrowed a total of $21.4 billion. One week earlier, 22 states had an aggregate $21.6 billion in outstanding loans to cover shortfalls. Five states Ã¢â‚¬" California, Indiana, New York, North Carolina and Ohio Ã¢â‚¬" each owe more than $1 billion which may require higher unemployment premiums or special assessments on employers in those states.
According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending May 11 were in California (+15,060), North Carolina (+1,826), Mississippi (+1,341), Florida (+1,329), and Georgia (+1,118), while the largest decreases were in New Mexico (-754), Oregon (-751), New Jersey (-747), Kentucky (-683), and Tennessee (-488).
_Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time._