For the week ending Dec. 14, initial applications for unemployment compensation rose far above the consensus forecast to a seasonally adjusted 379,000 from a revised 369,000 the previous week, the Department of Labor
reported Thursday. Except for the week ending March 30, first-time claims for the past two weeks were the highest of 2013, and higher than for the comparable weeks in 2012, which still were being affected by claims related to the aftermath of Hurricane Sandy. For the comparable week of 2012, initial claims were 366,000.
Initial claims had fallen to their lowest level in more than six years in August. And despite the year's end surge, the average number of initial claims for 2013 has been well below the average for 2012.
A Labor Department spokesperson said it's important to keep in mind that claims during the holiday season can be more volatile than at other times of the year. So the past two weeks could be just a blip that will disappear in the next few weeks or indicative of some new trend that won't become fully evident for a month or two. Some of the volatility in the weekly figure is flattened by the four-week running average, which rose last week to 343,500, an increase of 13,250 from the previous week's revised average of 330,250.
For the week ending Nov. 30, the total number of people making claims of state compensation programs and the federally funded Emergency Unemployment Compensation program enacted to ease the impact of long-term joblessness accompanying the Great Recession was 4,412,144, an increase of 606,051 from the previous week. For the comparable week of 2012, there were 5,402,429 persons claiming benefits in all programs.
Come Dec. 28, 1.37 million Americans who have been out of work for 27 weeks or more will lose their average weekly EUC compensation of $269 because Congress failed to extend those benefits. As Laura Clawson has noted, the consequences could be dire.
Senate Majority Leader Harry Reid has put an EUC extension high on the agenda—Jan. 6 or 7—when Congress returns from the holiday recess.
Here's Reid before cameras on Thursday: "The people that are unemployed for a long period of time are Democrats and they are Republicans. This is an issue that Republicans, I think, need more than we need it. This is something I think will be extremely difficult for them to turn away from."
And here's House Minority Leader Nancy Pelosi: "In fact, it gives us a bigger spotlight to put on it—'look, they would do this, they wouldn't close one corporate loophole even to extend it for three months to continue the debate.' No, these are fighting words for us."
The question now is how much of a fight Democrats will put up. Chances are that, if an EUC extension does clear both Senate and House, it will include another reduction in the number of additional weeks for which the long-term unemployed can receive compensation. As part of a budget deal in 2012, the number of weeks checks can be received from both state programs and the EUC was cut from 99 in the worst-hit states to 73. But only three states now provide that many weeks. The majority of states now provide 63.
EUC was first enacted in June 2008 when the official unemployment rate was 5.6 percent. That rate now is 7.0 percent. It is only that low because so many people have dropped out of the workforce or not entered it in the first place. The Economic Policy Institute has concluded, after adjusting for retiring workers and a long-term trend in later entry into the labor market by young workers, that unemployment now would be 10.3 percent if so many people in their prime working years had not dropped out of the labor force.