March is shaping up to have a more stable employment environment than February, but not as good as January (yet). That’s the safe conclusion to draw from this week’s Unemployment Insurance Weekly Claims Report. New claims dropped to 457,000. Last week’s number was unrevised. That’s still more than 10,000 new unemployment claims compared to five weeks ago. 20,000 more than Christmas. From the report:
In the week ending March 13, the advance figure for seasonally adjusted initial claims was 457,000, a decrease of 5,000 from the previous week’s unrevised figure of 462,000. The 4-week moving average was 471,250, a decrease of 4,250 from the previous week’s unrevised average of 475,500.
The advance seasonally adjusted insured unemployment rate was 3.5 percent for the week ending March 6, unchanged from the prior week’s unrevised rate of 3.5 percent.
The advance number for seasonally adjusted insured unemployment during the week ending March 6 was 4,579,000, an increase of 12,000 from the preceding week’s revised level of 4,567,000. The 4-week moving average was 4,575,250, a decrease of 8,000 from the preceding week’s revised average of 4,583,250.
The unadjusted numbers look better than the adjusted numbers. This is the gap created by the requirement that seasonal adjustments are zero sum. The unadjusted numbers looked much worse after Christmas, but the offsetting numbers have to be added back somewhere. The most important part is that they are better than those from a year ago. Back to the report:
The advance number of actual initial claims under state programs, unadjusted, totaled 432,166 in the week ending March 13, a decrease of 28,083 from the previous week. There were 601,163 initial claims in the comparable week in 2009.
The advance unadjusted insured unemployment rate was 4.1 percent during the week ending March 6, a decrease of 0.2 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,375,836, a decrease of 163,482 from the preceding week. A year earlier, the rate was 4.7 percent and the volume was 6,357,202.
The trend (seasonally adjusted) numbers for new claims must come down below 400k for a sustainable recovery in employment. We still have a way to go.
The good/bad lists provide some redemption for New York and California.
The good list (-1000 or more): NY, CA, CT, KY
The bad list (+1000 or more): AL, OH, OR, IL, NC
NC (the worst) was +5,100 vs NY (the best) at -10,929. This indicates a significant decrease in state to state volatility. I have no explanation for that and wonder if it is just a random occurrence. Construction took the majority of the blame in the bad list.
In other news, the jobs bill passed the Senate, and may already be signed by Obama. The bill creates $17.6 billion in tax credits. Of that, only a subset will be useful for job creation. That’s the elimination of the 6.2% Social Security payroll tax. This lowers the cost of hiring a new person (though since that money is certainly allocated, someone will pay for it). Most of the other taxes come out of profit, and don’t actually change the swing from loss to profit. As I previously stated, that doesn’t provide much incentive to hire someone new. If the decision to hire someone would increase profit under this bill, it would increase profit without the tax credit. The bill also allows another $20 billion for highway projects. As long as there are potholes to fill, this money will juice the jobs numbers.
This report seems to establish a lackluster trend down in new unemployment claims. If slow and steady takes us below 400k, there will be no complaints here. If the numbers don’t come down before states start tightening, things could get ugly.
