Initial Claims for Unemployment Drop to Lowest Level After the Great Recession

In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses unemployment insurance claims.

• Initial claims for unemployment insurance filed in the week ending April 27 dropped to their lowest level since the recession. Claims fell to 324,000, down by 18,000 claims from the previous week’s upwardly revised level.
• Weekly data is volatile, but the average level for 2013 shows that initial claims are back to the pre-recession level of about 350,000. Claims rose sharply during and in the aftermath of the recession.
• The states that have reported the largest decrease in claims are California, New York, Pennsylvania, Texas, and Indiana [1].
• The official unemployment data will be released tomorrow. Although initial claims for unemployment insurance are not used in computing the employment data [2], the decline in jobless claims point to a positive report tomorrow.

[1] For the week ending April 20.
[2] The Census Bureau uses a household survey to compute the employment data. Initial claims for unemployment insurance are not used in calculating unemployment because wage earners are only one segment of the total workforce and only eligible workers can file claims. A person is generally eligible to file a claim if he is unemployed through no fault of his own, has been searching for work, and has not exceeded the number of weeks to receive unemployment claims , which is generally about 26 weeks with some states providing extended benefits of a maximum of 14 weeks.