Total claims, including extended benefits, rises to 9.69 million
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - The number of people filing for state unemployment benefits for the first time fell 26,000 to a seasonally adjusted 550,000 last week, the lowest since mid-July, the U.S. Labor Department reported Thursday.
Initial claims have been in a fairly narrow range for the past eight weeks, down about 125,000 from the peak in March, but well above levels typical of a healthy economy.
The number of people claiming benefits of any kind remained above 9.5 million, not seasonally adjusted. Read the full report.
Economists surveyed by MarketWatch expected claims to fall to 558,000. The level of initial claims in the week ending Aug. 29 was revised up by 6,000 to 576,000. See Economic Calendar.
Meanwhile, the number of people collecting regular state benefits fell by 159,000 in the week ending Aug. 29 to a seasonally adjusted 6.09 million, the lowest number since April. The insured unemployment rate fell a tenth to 4.6%.
The four-week average of new claims fell 2,750 to 500,000. The four-week average smoothes out the data to minimize the impact of one-time changes due to weather, strikes or holidays.
The four-week average of continuing claims fell 37,750 to 6.18 million. Continuing claims peaked at 6.90 million in late June.
The decline in continuing claims in the past few months could show that companies are more willing to hire, or it could mean that more people were exhausting their benefits. Most likely, both explanations are in play. Typically, people are eligible for 26 weeks of state unemployment benefits.
Compared with a year ago, initial claims are up 30%, while continuing claims are up 79%.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. The jobless claims report shows businesses are still laying off workers at a rapid rate, and finding a replacement job is extremely difficult for those who've lost work. The unemployment rate rose to a 26-year high of 9.7% in August.
Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.
More than half of those collecting state benefits ultimately exhaust their regular state benefits before finding work, usually after receiving checks for 26 weeks. In July, the exhaustion rate was 50.7%, the highest on record dating back to 1972.
Many of those who exhaust their state benefits are eligible to collect under special federal programs for another 13 or 26 weeks. In the week ending Aug. 22, 3.54 million people were collecting benefits through extended federal programs, up 83,000 from the previous week. The government does not report regularly on the number of people who've exhausted their extended federal benefits.
The total number of people claiming benefits of any kind, not seasonally adjusted, in the week ending Aug. 22 was 9.69 million, compared with 9.66 million the previous week.
