First-time claims for unemployment insurance dropped to the lowest level in five years, falling 19,000 to 326,000 for the week ending July 27, the ""Labor Department"":http://www.ows.doleta.gov/press/2013/080113.asp reported Thursday. Economists expected the number of claims to edge up to 345,000 from the 343,000 originally reported for the week ending July 20. The number of filings for that week was revised to 345,000.[IMAGE]
The number of persons continuing to collect unemployment insurance for the week ending July 20, reported on a one week lag, spiked to a four-week low, plunging 52,000 to 2,951,000. The number of continuing claims for the week ending July 13 was revised up to 3,003,000 from the originally reported 2,997,000.
The number of initial unemployment filings was the lowest since the week ending January 19, 2008, when there were 318,000 claims filed.
Thursday's report on first-time claims will not affect Friday's monthly Employment Situation report for July. That report will be based on the ""reference week,"" the week of the month including the 12th calendar day. From mid-June to mid-July, the number of first-time claims dropped 19,000, and the four-week moving average of claims fell 2,000.
Payroll processing firm ADP said Wednesday its survey of employers suggested the number of payroll jobs to be reported Friday will show an increase of 200,000 payroll jobs in July. Economists surveyed by Bloomberg anticipate 175,000 new payroll slots and that the unemployment rate will fall to 7.5 percent from June's 7.6 percent.
The week-over-week drop in initial claims was the result of the seasonal adjustment factor for the week ending July 27, significantly lower than the factor applied for the week ending July 20.
The four-week moving average of first-time claims for the week ending July 27 was 341,250, down 4,500 from the previous week. The four-week average of continuing [COLUMN_BREAK]
claims--also on a one-week lag--edged down 500 to 3,026,000.
The drop in initial claims continued a seesaw pattern for this data set. First-time claims have alternated decreasing and increasing since the end of June.
The weekly drop in in continuing claims was the second large decline in a row; continuing claims fell 120,000 for the week ending July 13 and have fallen 218,000, about 7 percent, since the beginning of the year. The change in continuing claims is a reflection of hiring, although continuing claims have been affected by the federal budget sequester. Some states have responded to the sequester by reducing the weeks individuals are eligible for unemployment insurance and others by reducing the benefits.
The Labor Department said the total number of people claiming benefits in all programs for the week ending July 13 was 4,695,366, a decrease of 154,140 from the previous week. There were 5,964,451 persons claiming benefits in all programs in the comparable week in 2012. Extended Benefits were not available in any state during the week ending July 13.
According to the Bureau of Labor Statistics (BLS), 11,777,000 persons were officially considered unemployed in June, with 4,328,000 ""long-term"" unemployed--those out of work for at least 27 weeks. Of those individuals counted as unemployed, 7.08 million were not receiving any form of government unemployment insurance for the week ending July 13.
The Labor Department said states reported 1,564,517 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending July 13, a decrease of 49,668 from the prior week. There were 2,532,828 persons claiming EUC in the comparable week in 2012. EUC benefits this year were directly threatened by the federal budget sequester.
According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending July 20 were in California (+7,723), Missouri (+635), Kansas (+427), Illinois (+383), and Maine (+136), while the largest decreases were in New York (-14,966), Pennsylvania (-8,817), Alabama (-6,019), Georgia (-5,504), and Wisconsin (-3,324).
California reported the increase in first-time claims was attributable to layoffs in the service sector. Most of the states that reported decreases of 1,000 or more initial claims for the week ending July 20 cited fewer manufacturing layoffs.
_Hear Mark Lieberman Friday on P.O.T.U.S. Radio, Sirius-XM 124, at 8:45 a.m. and again at 12:30 p.m. Eastern._