Initial Jobless Claims totaled 505k, in line with estimates and flat with a revised 505k last week. Continuing Claims, which covers the first 26 weeks of benefits, fell by 39k but were slightly above forecasts. Emergency Unemployment Compensation which takes us past 26 weeks rose by 101k which makes clear that the fall in Continuing Claims is more because of the inability to find a job which thus keeps people collecting past 26 weeks. Extended Benefits, which runs past EUC, rose by 17k. With recent legislation, benefits run up to 99 weeks. Ironically, Larry Summers in the mid ’90s wrote a piece saying that unemployment insurance is one of the causes of long term unemployment “by providing an incentive, and the means, not to work. Each unemployed person has a minimum wage he/she insists on getting before accepting a job. Unemployment insurance…increase that reservation wage, causing an unemployed person to remain unemployed longer.”
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