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Economic Alert: NJ Unemployment Insurance Claims Activity


By Patrick J. O'Keefe, Director of Economic Research, J.H. Cohn

Earlier today, the U.S. Department of Labor published weekly unemployment insurance statistics, including data for New Jersey through the week ended December 10, 2011.

NJ Highlights:

  • Seasonal fluctuations mask underlying improvements;
  • Applications rose sharply as seasonal layoffs accelerate;
  • Continuing claims remain below 2010 level; and Number exhausting benefits declined in November.

View accompanying charts.

Initial claims (chart 1) registered the largest weekly increase (28.9%) since June. This is a typical seasonal surge - as was the case in June - and is expected to persist into January. The spike is starting from a lower base than in any year since 2005. Indeed, the four-week moving average, which smoothes weekly fluctuations, is equivalent to the average of the five years (2003-2007) prior to the recession.

Continuing claims (chart 3), that is individuals receiving regular weekly benefits, declined 7.1% in the week ended December 3, partially reversing the prior week's jump.

Pronounced week-to-week fluctuations are typical at this time of the year, but the prevailing seasonal pattern is for the number of beneficiaries to rise from early December into February.

Beneath the week-to-week gyrations, the total number of beneficiaries in New Jersey has been trending downward for almost two full years.

For the 102nd consecutive week, there was a year-on-year decline in the number of individuals receiving regular benefits. During the week ended November 26, the total number of claimants was 11.9% below 2010's comparable week.

During the most recent week, there were 43.7% fewer claimants than at the March 2009 cyclic peak. Nevertheless, the total number of claimants is about one-tenth (10.5%) above the pre-recession average.

New Jersey's insured unemployment rate (IUR), the number of individuals receiving benefits as a percent of total covered employment, slipped to 3.5% (from 3.8% in the prior week). During the comparable week in 2010 the IUR was 4.0%.

Reflecting the gradual improvement in the State's labor market, the number of claimants exhausting their regular benefits (chart 5) fell 6.6% in November and was 23.4% lower than a year ago. But the number of exhaustions remains 18.2% above the pre-recession average, suggesting that long-term unemployment in New Jersey remains elevated.

In sum: New Jersey's weekly unemployment claims activity remains consistent with typical seasonal patterns, while underlying trends in both applications and regular benefits are consistent with an economy that is growing moderately.

Patrick J. O'Keefe is director of economic research at J.H. Cohn. He can be reached at pokeefe@jhcohn.com or 1-877-704-3500.

View the "Insight on the Economy" resource page and sign up to receive Economic Notes.

Published date: 12/22/2011

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