Monday, May 13, 2013

Unemployment claims falling, 'cept for here

The national unemployment claims numbers keep falling, down to a 5-year low at a seasonally-adjusted 323,000 new claims last week. These numbers are also an improvement over what we were seeing this time last year - down more than 40,000 claims vs the same time in 2012 for seasonally-adjusted and unadjusted totals, as well as the 4-week moving average.

Some of this drop of lower jobless claims translated into job growth earlier at the end of 2012 and start of 2013, but March and April has seen the rate of job growth slow a bit (averaging just over 150,000 jobs when the previous 4 months were averaging around 235,000). If the fall in jobless claims numbers are followed with the same rate of hiring that we've seen in months past, we could be on track for a very good May jobs report.

But Wisconsin hasn't been part of this "falling claims party." In fact, in 3 of the last 5 weeks measured, Wisconsin had an INCREASE in jobless claims vs. the same week in 2012 while the U.S. was seeing its rate of claims fall by more than 10% year-over-year. This is a marked contrast to the last two years (which have been pretty lame for job growth as it is), as most of 2011 and 2012 had year-over-year drops of around 5-15% for new jobless claims in Wisconsin.

Year-over-year change in jobless claims, Wisconsin

Wisconsin's trend in jobless claims vs. the rest of the nation has also reversed. This graphic will show that in the year before Act 10 was passed in March 2011, Wisconsin was reducing jobless claims at a much faster rate than the rest of the nation. But as 2 years since Act 10 was signed have taken hold, that advantage of reduced unemployment claims in Wisconsin has steadily diminished, and we were basically matching the rest of the U.S. for much of last year. Now that we're heading into the 3rd year post-Act 10, Wisconsin is falling behind the U.S. in reducing claims, as the higher numbers in purple show.

Y-o-y change in unemployment claims, Wis. vs. U.S.

In fact, Wisconsin's bad jobs numbers gave them special notice in the last jobless claims report.
Wisconsin will resume a payable period in Tier 3 of EUC08 beginning May 12, 2013.

With the week ending May 11, 2013, Wisconsin has served a full 13 week "off" period in Tier 3 of EUC08. Given that the trigger rate for this state is currently at or above the 7.0 percent trigger rate threshold, and no unemployment rates will be released before May 17, 2013, Wisconsin meets the criteria to resume a payable period in Tier 3 of EUC08. The week beginning May 12, 2013, is the first week in which EUC08 claimants in Wisconsin who have exhausted Tier 2, and are otherwise eligible, can establish Tier 3 eligibility.
That's right, Wisconsin's the only state in the nation where people can now get unemployment benefits for LONGER because our unemployment rate has been going up (by comparison, the U.S. unemployment rate fell 0.3% in the same time period, and fell by another 0.1% in April).

This makes you wonder where the numbers end up for April's Wisconsin jobs report, which gets released on Thursday. The lousy April weather probably delayed a number of seasonal hirings that usually happen for Spring (heck, our lawn just got mowed for the first time Saturday), so that would be listed as a job "loss" in the next report, even without the jobless claims info. Then you combine the fact that you have some weeks in that time period with increases in jobless claims compared to April 2012 (a month where Wisconsin LOST 1,700 private sector jobs on a seasonally-adjusted basis), and it indicates that the Wisconsin numbers might not be good at all.

Of course, I could be wrong, as unemployment claims and bad weather aren't the only factors that go into job growth. And March's bad jobs numbers in Wisconsin could already have some of the "bad weather effect" taken into account, meaning it won't be as negative for April. But I have a hard time believing that April 2013 will be the month that the Wisconsin economy "turns the corner" in the Age of Fitzwalkerstan, especially in comparison to the big drops in jobless claims for the rest of the nation.

1 comment:

  1. The CPS survey week for last month was week 15, April 7th-13th and March's was week 11, the 10th-16th.

    Looking at the 2012 survey weeks, total UI claims dropped by 15,606 between March and April (from 112,943 to 97,337) and initial claims rose by 1,861 (from 11,162 to 13,023).

    This year, total UI claims in the same months' survey reference weeks dropped by 7,376 (from 101,356 to 93,980) and initial claims rose by 1,439 (from 10,994 to 12,433).

    I daresay the total claims is the one to pay more attention to, since it shows that the regular April jobs takeoff doesn't seem to have had the gusto it usually does at taking people from the ranks of the UI-claiming unemployed. Of course this is only looking at the currently insured subset of unemployed folk so isn't the whole picture, but the contrast is nonetheless a bit jarring compared to last year when the unemployment rate stayed flat at 6.9%.

    The March-April drop and the corresponding seasonally-adjusted U3 change have been as follows:

    2013: 7,376; 7.1% -> ???
    2012: 15,606; 6.9% -> 6.9%
    2011: 10,384; 7.6% -> 7.6%
    2010: 11,405; 9.0% -> 8.8%
    2009: 2,274; 8.4% -> 8.8%
    2008: 6,526; 4.3% -> 4.3%

    There's not an incredibly clear pattern here, but my money would be on a slight uptick in the unemployment rate for April on this basis.

    The UI claims trend of the last few weeks though has me more worried for the May figures.