First-time claims for unemployment insurance jumped 20,000 to 362,000 for the week ending February 16, the Labor Department reported Thursday. Economists expected 359,000 initial unemployment claims.
The spike in filings—the largest in three weeks—marked a reversal of what had been a downward trend in layoffs. The report on claims for the week ending February 9 was revised to 342,000 from the originally reported 341,000.
The four-week moving average of first time claims increased 8,000 to 360,750, the second highest level of the year.
Continuing claims—reported on a one-week lag—rose 11,000 to 3,148,000. The prior week’s report of continuing claims was revised upward to 3,137,000 from the original report of 3,114,000. The four-week moving average of continuing claims fell 6,750 to 3,186,250, the lowest level since July 2008.
The continuing claims data series tracks the number of longer-term unemployed Americans who qualify for regular state jobless benefits and often shows large movements, depending on first-time claims 26 weeks earlier and legislative changes to state unemployment programs.
The larger-than-expected increase in first-time claims was affected in part by the seasonal adjustment factors the Labor Department applies to account for exogenous events that historically affect claim filings. Those factors, as published by the Labor Department, will be unfavorable for the next six weeks.
This week’s report on initial claims covered the same week used by the Bureau of Labor Statistics (BLS) for the monthly employment situation report, which will be released March 8. From mid-February to mid-March, first-time claims for unemployment insurance increased 27,000, and the four-week average of initial claims rose by 750. Those increases will be a drag on the employment and jobs numbers, adding another hurdle for new hiring to overcome.
Claims reports in the first two months of any year are highly volatile, with seasonal adjustments moving in a wide range to attempt to normalize for layoffs that typically occur in industries that staff up at year-end. In addition, reports are affected by holidays, which delay processing of claims filed electronically.
Initial claims fell in three of the first seven weeks of 2012, dropping an average of 15,000. In the four weeks in which claims rose, the average increase was a little over 8,000. This year, claims have fallen in four of the first seven weeks with an average drop of 18,500 but the average increase in the other three weeks was 23,000 suggesting employers may have done even more short term hiring for the holiday season.
The total number of people claiming benefits in all programs for the week ending February 2 was 5,610,327, a decrease of 307,848 from the previous week. There were 7,486,681 persons claiming benefits in all programs in the comparable week in 2012.
According to the BLS, 12,332,000 persons were officially considered unemployed in January, which means that of those individuals counted as unemployed, 6.72 million were not receiving any form of government unemployment insurance, up from 6.41 million one week earlier.
The Labor Department said states reported 1,849,056 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending February 2, a decrease of 232,319 from the prior week. There were 2,903,219 persons claiming EUC in the comparable week in 2012.
States continue to borrow from the federal government to cover shortfalls in those funds which will eventually have to be repaid—unless Congress intervenes—with higher assessments on employers. Since those assessments are a percentage of payrolls, they discourage employers from adding new workers. As of February 15, 23 states had borrowed a total of $28.3 billion. One week earlier, 23 states had an aggregate $28.1 billion in outstanding loans to cover shortfalls. Five states—California, Indiana, New York, North Carolina and Ohio—owe more than $1 billion, which may require higher unemployment premiums or special assessments on employers in those states.
According to the Labor Department detail, also reported on a one-week lag, the largest increases in initial claims for the week ending February 9 were in Kansas (+2,344), Puerto Rico (+492), Virginia (+465), Indiana (+205), and Rhode Island (+176), while the largest decreases were in California (-4,830), New York (-4,401), Oregon (-2,211), Pennsylvania (-2,020), and Wisconsin (-1,670).