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NJ UI Claims Jump


by Patrick J. O'Keefe, Director of Economic Research

The most recent U.S. Department of Labor unemployment insurance (UI) data for New Jersey show that through the week ended September 6: 

  • Applications for benefits rose sharply due to gaming industry layoffs;
  • The number of current recipients was little changed;
  • NJ’s insured unemployment rate (IUR) ranks highest among all states.

View accompanying charts.

Note: Today, the New Jersey Department of Labor is scheduled to release employment and unemployment data for the month of August. Those statistics, prepared by the Bureau of Labor Statistics, reflect conditions during the week of August 10.

Initial claims (chart 1), a proxy for layoffs, surged (+38.2%) in the first week of September largely as a result layoffs relating to casino closings in Atlantic City.

Adjusted for seasonal factors (chart 2), the rise in new filings was more pronounced (+41.1%).

The seasonally adjusted four-week moving average of applications (chart 3) – which adjusts for regularly recurring changes (e.g., summer school closings) and smoothes weekly fluctuations – rose only modestly (+5.4%). On that measure, prior to the gaming industry’s cutbacks, applications for benefits were drifting downward. 

Given the contraction in the State’s gaming industry, new claims are expected to rise further in the coming weeks.

Continuing claims (chart 4), that is individuals already receiving regular benefits, were little changed (-1.3%) in the most recent week. 

The count of ongoing claims usually remains stable into September and then declines as school employees are recalled from summer furloughs. That pattern is expected to recur this year, but the decline will be less as the number of those returning to work will be partially offset by those qualifying for benefits due to the casino-related reductions.

At the end of August, there were 5.7% fewer beneficiaries than a year ago, but 4.6% more than on average during the five years (2003-2007) prior to the recession (chart 5).

Adjusted for seasonality and weekly fluctuations (chart 6), the number of beneficiaries was 1.4% above mid-June’s six-year low.

The State’s insured unemployment rate (IUR), the number of beneficiaries as a percent of total covered employment, was 3.3% for the sixth week. New Jersey has the highest IUR of all states.

In sum, although New Jersey’s unemployment claims activity had been gradually improving, recent gaming industry-related cutbacks have disrupted that trend.

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