Thursday, January 31, 2013

Extended Unemployment Claims Surge

Extended Unemployment Claims SurgeThe increase in initial unemployment claims by 38,000 found on this week's jobs report from the Department of Labor could be easily dismissed as statistical noise, as initial claims had been holding steady for 13 months, with the exception of a spike in November (which correlated with a plunge in the National Federation of Independent Business (NFIB) survey and the reelection of Obama). However, the report also shows a surge of extended claims by more than 418,000, which suggests that nearly a half-million additional people who became eligible for unemployment benefits at the end of last summer were unable to secure employment for more than 6 months.

**Keep in mind that the conclusion of seasonal jobs typically does not make one eligible for unemployment benefits. (Most unemployment departments require minimum earnings and time-on-the-job which seasonal jobs do not provide.)**

Here are the raw data from the report. I circled the increase in extended claims. Notice the year-over-year decrease in extended claims by nearly 1 million. This is NOT necessarily good news, as many of these 1 million people may not have been able to secure employment by the end their 99 week eligibility period.

Extended Unemployment Claims Surge - DOL job report January 31, 2013

Here's a chart of long-term unemployed as a share of total unemployment. As you can clearly see, the percentage of long-term unemployment has been at record levels for some time but has been declining slightly. No empirical evidence exists to prove this, but the decline could be attributed to unemployed workers disappearing from the radar screen because they exhausted their 99 weeks of benefits. Indeed, this week's spike in extended benefits suggest that many, many Americans are still going through very long periods without securing employment.

Extended Unemployment Claims Surge - long-term unemployment chart

0 comments:

Post a Comment