–If Congress Does Not Act,Benefits Phase-Down Starts Jan 7, Accelerates
–No States Estimated; Continuing Claims -79,000 to 3.546 Mln Dec 10 Wk

By Denny Gulino and Ian McKendry

WASHINGTON (MNI) – Initial claims for U.S. state unemployment
benefits dropped unexpectedly by 4,000 to 368,000 in the December 17
week, the lowest level since the April 19, 2008 week, the Labor
Department reported Thursday.

In a comparison of the monthly jobs report survey weeks, the latest
claims data were 28,000 lower than in the Nov. 12 week’s 392,000.

Economists surveyed by Market News International had expected
initial claims to come in at 380,000, up 14,000 from the 366,000 level
initially reported in last week’s data. That week’s claims are now
revised up 2,000 to 368,000.

A Labor Department analyst said the latest report is fairly
clean, and no states were estimated.

If Congress does not act by the end of the year, which appears the
most likely course, the first cutoff of benefits will be no sooner than
Jan. 7 and will rapidly accelerate through the weeks following, but not
as rapidly as many analysts have predicted. If Congress later in
January restores the benefits retroactively, a huge administrative
burden for the states, the restoration process will be similar to mid
2010, when Congress delayed extending benefits for seven weeks.

The analyst said seasonal factors had expected a decline of
2.8% or about 15,000 claims in the latest week, and the results
were a larger decline, of 4.6% or 17,256.

The initial claims seasonally adjusted 4-week moving average was
380,250 in the December 17 week, a decrease of 8,000 from the previous
week and the lowest level since the June 21, 2008 week.

Continuing claims in the Dec. 10 week decreased 79,000 to
3,546,000 after adjustment. Unadjusted continued claims rose 67,895 to
3,606,352 compared to the year ago’s level of 4,179,504.

The seasonally adjusted insured unemployment rate was down
another tenth to 2.8% in the December 10 week from the previous week. A
year ago it was 3.3%, both adjusted.

The unemployment rate among the insured labor force is well below
that reported monthly by the Labor Department because claims are
approved for the most part only for job losers, not the job leavers and
labor force reentrants included in the monthly report.

The Labor Department said that the level of unadjusted Emergency
Unemployment Compensation benefits claims dropped by 107,769 in the Dec.
3 week, bringing that category to below 3 million, at 2,941,157.
Extended benefits claims fell 28,578 to 564,519 not seasonally adjusted
in the same week.

The Labor Department reported that a total of 7,149,769 persons
claimed unemployment benefits in the Dec. 3 week, an decrease of 299,738
and well below the 8,886,682 a year earlier. These data are not
seasonally adjusted, and include regular state claims, federal employee
claims, new veterans claims, the EUC and extended benefits programs,
state additional benefits, and STC/Workshare claims.

** Market News International Washington Bureau: 202-371-2121 **

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