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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 statistics, including data for New Jersey through the week ended March 10, 2012.

NJ Highlights:

  • New claims resumed downward trend;
  • Continuing claims declined from prior week but remain seasonally elevated;
  • Insured unemployment rate reversed prior week's uptick; and
  • Claimants exhausting their regular benefits fell to lowest level since 2008.

View the accompanying charts.

Initial claims (chart 1), a proxy for layoffs, fell 2.5%. The number of applications has fallen in eight of the ten weeks since 2012 began and is fully 60.0% less than the post-holiday peak recorded in the last week of December.

The number of applications for benefits during the week ended March 10 was 9.8% below the weekly average during the five years (2003-2007) prior to the recession.

The four-week average (chart 2), which smoothes weekly fluctuations, fell for the eighth consecutive week and reached the lowest mid-March reading since 2008.

Continuing claims (chart 3), that is individuals receiving regular weekly benefits, fell 3.6% in the week ended March 3. The count was up in the prior week.

While fluctuating week-to-week, the number of beneficiaries has been virtually flat since mid-January. And as can be seen from the four-week moving average (chart 4), the number of claimants during the past two months has been below the comparable period in each of the past three years.

The number of claimants is poised to begin declining and should shrink at an accelerating rate into the spring.

Although the number of regular claims is seasonally elevated, the longer-term trend has been - and remains - downward. For the 115th consecutive week, there was a year-on-year decline in the number of recipients. The total number of claimants in the last week of February was 7.6% below the comparable week in 2011.

The continuing claims count is 32.2% below the recessionary peak, which occurred in mid-March 2009. Yet despite trending downward for more than two years, the total number of beneficiaries is 33.2% higher than the pre-recession average.

New Jersey's insured unemployment rate (IUR), the number of beneficiaries as a percent of total covered employment, was 4.3% (down from 4.4% in the prior week) and, together with three other states, ranked fifth highest among all states. During the comparable week in 2011, the State's IUR was 4.8%.

Exhaustions (chart 5), that is claimants reaching the end of their entitlement period, fell to the lowest level since November 2008. While the decline is partially attributable to reduced initial claim filings during the summer of 2011, it also suggests that the duration of unemployment is declining as hiring (and recalls) increase.

In sum: Applications for unemployment insurance benefits in New Jersey are below the pre-recession average and continue to decline. And while the number of beneficiaries remains seasonally elevated, the count is well below last year's already reduced levels and continues on the downward trend that began at the end of 2009.

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: 3/22/2012

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