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Economic Alert: Unemployment Claims Up - Again


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 April 14, 2012.

NJ Highlights:

  • New claims continue typical April surge;
  • Continuing claims fall for sixth consecutive week; and
  • Insured unemployment rate remains unchanged.

View accompanying charts.

Initial claims (chart 1), a proxy for layoffs, rose for the third week and were at the highest level since mid-January. As highlighted on the chart, it is typical for applications to rise sharply in April, but the spike is usually temporary.

This year's surge occurred somewhat earlier than usual. Consequently, when compared to the same week in 2011, new claims were up 51.6%.

If past patterns persist, applications should drop sharply in the next few weeks and then fluctuate at that lower level for the remainder of the spring.

The four-week average (chart 2), which smoothes weekly gyrations, rose due to the recent surge and, for the first time since February, exceeded the weekly average during the five years (2003-2007) prior to the start of the recession.

Continuing claims (chart 3), that is individuals receiving regular weekly benefits, slipped a bit (-0.1%) in the first week of April. Although marginal, it was the sixth consecutive week-on-week drop.

As a consequence of the seasonal decline in new claims during the first three months of 2012, the number of beneficiaries should continue decline into June.

Ongoing claims have been trending downward since the end of 2009. For the 120th consecutive week, there was a year-on-year decline in the number of recipients. The total number of claimants in the last week of March was 6.8% below the comparable week in 2011.

Although the continuing claims count has fallen 39.8% from the March 2009 recessionary peak, the number of beneficiaries is 18.3% higher than the pre-recession weekly average.

New Jersey's insured unemployment rate (IUR), the number of beneficiaries as a percent of total covered employment, was 3.8% for the second week. It was 4.1% in the comparable week of 2011.

In sum: Applications for unemployment insurance benefits in New Jersey rose again in the most recent week, as is typical in April. New claims are expected to move sharply downward in the next few weeks and then remain relatively stable through May.

Although the number of individuals collecting regular benefits remains well above the pre-recession average, the count continues on a downward trend that began more than two years ago. The rate of decline should continue to accelerate as seasonal factors accentuate the longer-term slide.

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.

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

Published date: 4/26/2012

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