Initial jobless claims rise; continuing claims hit new record

WASHINGTON (MarketWatch) -- The Labor Department reported Thursday that first-time claims for state unemployment benefits rose in the most recent week, as ongoing claims reached yet another record high.

Initial jobless claims rose a seasonally adjusted 27,000 to 640,000 in the week ended April 18. The four-week average of initial claims fell 4,250 to 646,750. The four-week average is considered a better gauge of labor market conditions than the volatile weekly figures because it smoothes out one-time distortions caused by holidays, bad weather or strikes.
While the most recent gain in initial claims may dim hopes among some observers for a sustained trend of sharply falling claims, some analysts see a possible ray of light for the labor market.

"While it is too soon to say that jobless claims have peaked, the four-week average suggests that claims may have leveled out at very high levels, which suggests that the rate of job losses may be stabilizing (alas, also at very high levels)," wrote analysts at RDQ Economics in a research note.
In the prior weekly data, initial claims fell a revised 47,000. However, some of that drop may be due to Easter-related distortion.
For the week ended April 11, the number of people collecting state unemployment benefits reached yet another new record, rising 93,000 to 6.14 million -- more than double the level in the prior year. Continuing claims have reached new weekly records since late January, signaling that workers are having a tough time finding jobs. The four-week average of continuing claims rose 142,500 to a record 5.94 million.

The insured unemployment rate -- the proportion of covered workers who are receiving benefits -- rose to 4.6% from 4.5%, reaching the highest level since January 1983.
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 latest claims report shows that finding a replacement job remains difficult.
Jobless claims a widely tracked indicator because they are close to real time, and are based on actual filings, rather than statistical inference. Escalating levels of initial and continuing claims signal prospects for double-digit unemployment, in the view of many economists.

Typically, state unemployment benefits run out after 26 weeks for those who are eligible. 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.