–Labor Dept Analyst: Surge In Claims Due To Timing Not Magnitude
–4-Week Moving Average +5,500 To 416,500

By Brai Odion-Esene and Ian McKendry

WASHINGTON (MNI) – Initial claims for U.S. state unemployment
benefits rose 35,000 to 445,000 in the January 8 week, far above
expectations, the U.S. Labor Department reported Thursday.

A Labor Department analyst said that seasonal factors had expected
a large increase in unadjusted claims for three reasons. Firstly, there
have been two consecutive weeks with Federal holidays, meaning some
“administrative backlog” due to the shortened work-week.

Secondly, “this is normally, historically speaking, the highest
week for NSA claims,” the analyst said.

Finally, there has been a quarter change effect, he said, where
claimants will hold off filling for benefits at the end of one year in
favor of the next because claimants who file at the beginning of each
calendar quarter are eligible for more benefits.

As a result, seasonal factors expected a 22.7% rise in NSA claims,
or about 131,000 claims in the January 8 week. Unadjusted claims
actually rose 33%, or 191,686 claims, to 770,413, resulting in the surge
in the seasonally adjusted claims level. Unadjusted claims were at a
level of 815,593 in the comparable week a year ago.

The analyst said that claims from Alaska, Georgia and South
Carolina were estimated in the current week.

Economists surveyed by Market News International had expected
initial claims to drop to 406,000 in the current week, from the 409,000
level originally reported in the previous week. The January 1 week’s
level was revised up to 410,000.

The Labor analyst said there was not unusual in the data reported
by the states, and the issue appears to be one of volatility not a large
rise in additional layoffs. “I would urge you to focus on the four-week
moving average as a measure that sort of takes out some of the
volatility,” he said.

The seasonally adjusted 4-week moving average rose by 5,500 to
416,500 in the January 8 week.

In the January 1 holiday week, continuing claims fell by a massive
248,000 to 3,879,000, the lowest since October 25, 2008 (3.845m).
Unadjusted continuing claims jumped by 351,439 to 4,766,951 in the
January 1 holiday week, still well below the 6,013,891 level a year
earlier.

The seasonally adjusted insured unemployment rate fell to 3.31 in
the January 1 week. The current rate is down sharply from 3.7% in the
comparable rate a year earlier.

The unemployment rate among the insured labor force is well below
that reported monthly by the Labor Department because claims are
approved for the most part only for job losers, not the job leavers and
labor force reentrants included in the monthly report.

The Labor Department said that the level of unadjusted Emergency
Unemployment Compensation benefits claims rose by 195,429 in the
December 25 holiday week, bringing that category to 3,773,092. Extended
benefits claims fell by 67,062 to 862,331 not seasonally adjusted in the
same week.

The Labor Department reported that a total of 9,193,838 persons
claimed unemployment benefits in the December 25 holiday week, up
422,523 from the 8,771,315 claims reported in the previous week and well
below the 10,891,548 persons in the comparable week a year ago. These
data are not seasonally adjusted, and include regular state claims,
federal employee claims, new veterans claims, the EUC and extended
benefits programs, state additional benefits, and STC/Workshare claims.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]