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Two weeks after tearing up the East Coast, Hurricane Sandy rocked first-time claims for unemployment insurance.
In the first full week after the storm, initial claims shot up 78,000 to 439,000, the highest level since April 2011 for the week ended November 10, the ""Labor Department"":http://www.ows.doleta.gov/press/2012/111512.asp reported Thursday. Economists expected 376,000 initial claims filings.
[IMAGE]The previous week's report was revised upward to 371,000 from the originally reported 363,000. In addition to the direct impact on businesses, the storm also forced the closing of government offices that process claims filed by telephone or online.
Continuing claims--reported on a one-week lag--rose 171,000 to 3,334,000 after falling 99,000 one week earlier. The previous week's initial report of 3,127,000 continuing claims--which would have been a one-week drop of 135,000--was revised upward to 3,163,000 from the originally reported 3,127,000. The continuing claims report tracks the number of longer term unemployed who qualify for regular state jobless benefits.
The week-over-week increase in first-time claims was the largest since claims jumped 96,000 one week after Hurricane Katrina ravaged the Gulf Coast in 2005. Two weeks later, claims fell 65,000, but then jumped 25,000 when the Gulf was hit by Hurricane Rita. The two storms had a stronger impact on continuing claims, which rose 285,000 in their wake.
The storm-related impact to the East Coast was greater than that of Hurricane Isaac, which struck in August 2011 and caused a temporary two-week spike of 14,000 claims of unemployment insurance filings.
Indeed, the impact of Sandy on claims may continue as it did with the 2005 and 2011 storms.
[COLUMN_BREAK]On a longer-range trend basis, the four-week moving average of initial claims increased 11,750 to 383,750 and the four-week moving average of continuing claims rose 71,000 to 3,254,500.
While not covering the same week as the monthly employment situation report, the Bureau of Labor Statistics will use data collected during the week ended November 15 for that release. Sandy could nonetheless have an impact on the jobs total and send the unemployment rate back above 8 percent for November as businesses remain closed.
At the same time, though, Sandy could well affect reporting of jobs numbers (which is voluntary) as businesses concentrate on rebuilding rather than completing a government form.
The total number of people claiming benefits in all programs for the week ending October 27 was 4,977,808, a decrease of 100,423 from the previous week. There were 6,773,260 persons claiming benefits in all programs in the comparable week in 2011.
Extended benefits were only available in New York during the week ending October 27. According to the BLS, unemployment was 12,258,000 in October, which means that of those individuals counted as unemployed, 7.28 million were not receiving any form of government unemployment insurance, up from 7.18 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 13, 20 states have an aggregate $26.0 billion in outstanding loans to cover shortfalls, down from $26.1 billion one week earlier. Absent Congressional action, interest on those loans could lead to states increasing contribution rates required from employers.
States reported 2,085,605 persons claimed emergency unemployment compensation (EUC) benefits for the week ending October 27, a decrease of 32,570 from the prior week, the Labor Department said. There were 2,935,466 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 3 were in Pennsylvania (+7,766), Ohio (+6,450), New Jersey (+5,675), Michigan (+2,373), and Connecticut (+1,783), while the largest decreases were in California (-8,149), New York (-2,241), Florida (-939), Georgia (-913), and Indiana
(-603).
