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Economic Alert: NJ Unemployment Insurance Claims Decline


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

Earlier today, the U.S. Department of Labor published weekly unemployment insurance (UI) statistics, including data for New Jersey through the week ended July 28, 2012.

NJ Highlights:

  • Applications declined for fourth consecutive week;
  • Continuing claims slipped for a second week.

View accompanying charts.

Initial claims (chart 1), a proxy for layoffs, fell 12.3% in the most recent week. It was the fourth consecutive weekly decline since the end of the annual summer surge (largely due to school-related furloughs).

Applications for benefits were 14.6% below the weekly average during the five years (2003-2007) prior to the recession and are expected to fluctuate in a narrow range for the next few months.

Continuing claims (chart 3), that is individuals receiving regular weekly benefits, were little changed (-0.5%) in the week ended July 21, but were 6.1% below the comparable week in 2011.

Ongoing benefits are expected to fluctuate around the recent seasonally-elevated level for a few weeks and then decline steadily into the autumn.

The number of recipients has been trending lower since the end of 2009. Over that period (a total of 135 weeks), the claimants count has declined year-on-year in all but one week. As a consequence, total claims were 38.9% below the March 2009 peak. But despite the sustained decline, the total is 20.0% above the pre-recession average.

Covered employment (Chart 6), that is jobs subject to the State-administered UI program, is 5.7% below the peak level, which was recorded in 2008's fourth quarter.

The covered jobs count has been flat since the end of 2010, which suggests that current claims activity is attributable to normal turnover rather than a weakening in the demand for workers.

The State's insured unemployment rate (IUR), the number of beneficiaries as a percent of total covered employment, was 3.8% for the second straight week. New Jersey and Pennsylvania shared the highest IUR among all states.

In sum: Applications for UI benefits have retreated sharply from the annual summer surge and are expected to drift lower in the coming weeks. As a result, the number of individuals receiving regular benefits should remain near the current, seasonally-elevated level for a few weeks and then decline into the autumn.

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: 8/9/2012

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