One item in the news Thursday was the U.S. Department of Labor’s weekly report on seasonally adjusted initial unemployment insurance claims. New claims increased to 500,000, and as Calculated Risk notes, this is the highest level in the past 9 months. Further national analysis is available from The Economist and Mark Thoma, among others. Below, we take a quick look at unemployment insurance claims in Oregon, essentially updating the previous look from a few months ago. Overall, similar to the nation, Oregon’s claim activity has basically moved sideways throughout 2010 without showing any real signs of further improvement in the labor market.
The first two graphs show the level of initial claims in Oregon and the nation. While the numbers are down quite a bit from the depths of the recession, there has not been sizable improvements in recent months.
The third graph shows the dollar value of unemployment benefits paid to Oregonians. There has been a decline in regular program benefits paid, however the total benefits paid has remained relatively steady. This is indicative of the unemployed exhausting their 26 weeks of benefits (the length of the regular program) and moving to the extension program benefits.
The exhaustion rate of unemployment benefits in Oregon has stayed at an extremely high level the past few months, around 54%, an historic high with data going back to the early 1970s
Oregon’s exhaustion rate has now surpassed the nation’s in four of the past five months. While Oregon’s rate is typically lower than the national average, it rises during recessionary periods.
Finally, as initial claims are indicative of the health of the labor market, they can be tracked to gauge general employment trends in the economy. On a seasonally adjusted basis, weekly claims in the 8,200 range tend to coincide with positive employment growth in Oregon. The first seven months of 2010 are highlighted in red in the graph below. Even with claim activity hovering in the 9,000 – 10,000 per week range, Oregon has seen a number of months with positive employment growth. Unfortunately these numbers are the result of the temporary Census workers as they were hired during the Spring months and are now being let go after completing their assignments. With that being said, claims continue to remain at elevated levels which are typically associated with continued employment declines. Initial claims will be one of the important factors to continue to follow as it is generally considered a leading indicator of the economy.