Fewer Claims for Unemployment Insurance in August Portend Lower Unemployment Rate

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 unemployment insurance claims.

  • Initial claims for unemployment insurance dropped in the last week of August to 323,000 claims, the lowest number of claims filed since the economy fell under the Great Recession. This brings the weekly average number of claims filed in August to 329,771 claims, which is fewer than the number of claims filed in July and the year-to-date average for 2013. The number of claims is now well below the 350,000 which is considered the normal level for a healthy economy.
  • Although initial claims data is not used to compute the overall unemployment rate because those filing initial claims cover only a segment of the labor market, fewer unemployment claims filed portend a lower unemployment rate since those currently employed are not losing their jobs.
  • The Department of Labor will release the unemployment rate figure for August tomorrow, but the favorable claims data and the stronger GDP growth in the second quarter point to a positive report tomorrow.