Latest on Unemployment Insurance Claims Filed in Week Ending Dec 7

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 the latest unemployment insurance claims.

• Initial claims for unemployment insurance filed in the week ending December 7 spiked up to 368,000, an increase of 68,000 claims from the previous week. The increase is surprising, given the drop in the unemployment rate (to 7 percent) in November. One cannot read too much into this one data point, and for now, the long-term trend has been one where claims have been on a decline with the 4-month moving average level at 328,750, which is hovering at the 300,000 level that most analysts consider as normal.

• On a related issue, there are 1,248,932 people who will be impacted by the removal of federally-funded unemployment insurance under the proposed budget that came out of the bicameral budget committee. The Emergency Unemployment Compensation (EUC) program provides additional weeks of federally-funded benefits for unemployed workers in states that have unemployment rates of 6 percent or higher [1]. Based on October 2013 data, 36 states and the District of Columbia have unemployment rates of at least 6 percent and would therefore be the most affected if this program is not funded.

[1] Tier 1: 14 weeks
Tier 2: 14 weeks if the state unemployment rate is 6% or higher
Tier 3: 9 weeks if the state unemployment rate is 7% or higher or if insured unemployment rate is 4% or higher
Tier 4: 10 weeks if the state unemployment rate is 9% or higher or 6% insured unemployment rate