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NJ Unemployment Claims Decline Sharply


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

Earlier today, the U.S. Department of Labor published unemployment insurance (UI) data, including statistics for New Jersey through the week ended January 25. 

NJ Highlights: 

  • Applications down by more than one-half from year’s end;
  • Continuing claims fall for second week;
  • Insured unemployment rate remains elevated.

View accompanying chartbook.

Initial claims (chart 1), a proxy for layoffs, fell sharply for the second consecutive week, most recently by more than one-quarter (-25.7%). In the week ended January 25, filings for benefits were more than one-half (-54.5%) less than the post-holiday spike that occurred at the end of December. 

When adjusted for seasonal patterns (chart 2), new filings were down by “only” one-quarter (-23.6%) from the year-end jump and, as a result, were well below (-10.3%) the average during the five years (2003-2007) prior to the recession. 

The seasonally adjusted four-week average (chart 3) – which accounts for regularly recurring changes and smoothes weekly fluctuations – was the lowest since mid-April 2011 and at the low end of the range that has persisted (except for the Sandy-related spike) since the beginning of 2012.

Continuing claims (chart 4), that is individuals receiving regular benefits, declined 9.1% from the prior week, the second consecutive weekly decline in what should be a downward trend that will be interrupted only occasionally through the spring.

Adjusted for seasonality (chart 5), the number of beneficiaries was down 6.3% from the prior week. The seasonally adjusted total is 9.5% above the pre-recession average but 6.3% less than 2013’s comparable week.

The State’s insured unemployment rate (IUR), the number of beneficiaries as a percent of total covered employment, was unchanged from the prior week’s 3.9%. New Jersey’s IUR was fourth highest among all states.

In sum: Applications for unemployment insurance benefits in New Jersey have declined substantially over the past two weeks and are likely to continue downward. 

Continuing claims, which have dropped sharply since the start of the year, are expected to move generally downward into May.

The statements, opinions, and conclusions contained herein are based solely upon the author’s own studies, research, and personal experience. Neither CohnReznick nor the author make any representation or warranty as to the accuracy or completeness of this information. CohnReznick and the author expressly disclaim any liability for any loss or damage which may be incurred, of any kind whatsoever, as a result of or arising from the use of any of the information contained herein or reliance on the accuracy or completeness of it.

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