Continuing Claims is a United States weekly economic report released every Thursday morning from Form r539cy at 8:30 Eastern Standard Time that determines the number of workers that initially filed and continued to receive unemployment insurance.
Data is compiled by the Employment and Training Administration an agency within the Department of Labor from all 50 states, Puerto Rico, Virgin Islands and Washington D.C. The ETA calculates rates of unemployment for seasonally adjusted workers, non seasonally adjusted workers, newly discharged veterans, former federal civillian employees and railroad retirement board employees.
The railroad industry was granted a special provision in 1938 under HR 10127 titled the Railroad Unemployment Insurance Act that allows railroad employees to collect unemployment but who are exempted from federal tax on those benefits. The ETA further calculates not only initial and continuing claims for each of these categories but initial and continuing claims for workers whose benefits were first time claims and those whose claims were either extended or received under emergency unemployment compensation, disaster relief and those that fall under previous Trade Readjustment Acts. Modern day trade acts began with HR 10710 termed the Trade Act of 1974 where benefits were extended to 52 weeks whose allowances have increased since this original passage.
Trade Adjustment Allowances is an income to persons who exhausted unemployment compensation whose jobs were affected by foreign imports. The Trade and Globalization Adjustment Assistance Act of 2009 is just one example where benefits were extended to workers as well as provisions for retraining and extension of cash benefits. Workers can now collect up to 120 weeks of cash benefits along with retraining provisions.
Unemployment Insurance for Disaster relief began in 1974 with the Disaster Relief Act but has been expanded over the years to include pregnant women, sickness and hardship cases. Federal civillian employees began coverage in 1954 with HR 9707 while Korean War veterans began receiving unemployment insurance in July 1952 with HR 7656 termed the Veterans Readjustment Assistance Act of 1952. Since 1952, the collection of benefits has expanded with passage of HR 4717 termed the revenue Act of 1982 to all service personnel.
The program called Unemployment Insurance that is measured in the Initial and Continuing Claims report today began in 1935 with passage of HR 6635 called the Social Security Act. Coverage was initially extended to national and state banks who were members of the Federal Reserve System and to “instrumentalities” not owned by state and local governments.
As time progressed and as more laws were passed, more industries began coverage with benefit weeks that expanded and contracted. For example, 1946 saw expansion of UI benefits to Maritime workers while Korean War vets received 26 weeks of benefits yet federal civillian workers received 20 weeks.
With passage of HR 12065 in 1958, benefits began extensions of 13 weeks for those that exhausted their claim but who still were not gainfully employed. Extensions were granted to 39 weeks in the early 60’s with passage of HR 4806.
With passage of HR 14705 called the Employment Security Amendments of 1970, UI benefits were extended to employees for 39 weeks who were affected by recession. This law introduced triggers for the first time.
For example, UI was extended to 39 weeks if the unemployment rate exceeded 4.5 % for 3 consecutive months. As recession ended, benefits were scaled back to whatever the norm was during that time. Today, all industries are eligible under the UI program with a larger expansion in not only benefit weeks but extensions.
The collection of data of employed and unemployed workers in the UI program by the federal government dates its history to the original passage of the Social Security Act of 1935. Then, UI information was collected on an annual basis.Yet as a formal economic release and as a means to compile data for formal distribution, the continuing and initial claims report began in 1967 as a weekly release.
The Department of Labor was responsible for collection and dissemination of data. All 50 states, the Virgin Islands, Puerto Rico and Washington D. C participate. These states electronically send their weekly UI claims to the ETA .This information is disseminated by initial claims and continued claims and separated by each state initially to report trends and differences in trends.
The report released Thursday is quite detailed and reports any changes to states such as an increase or decrease in reported filings for initial or continuing claims. The ETA doesn’t have the means to report on industries that experience an increase or decrease in claims. They only report initial and continuing claims on the full report along with any changes to states.
Further, the ETA reports on seasonal and non seasonal trends and marked by a 4 week moving average. The term seasonally adjusted first entered the lexicon with passage of HR 12987 that established the National Commission on Employment and Unemployment Statistics.
The purpose of this commission was to measure employment and unemployment trends to find possible deficits in industry that may need help in the future. Since, the ETA adopted the seasonal adjusted aspects in their report marked for the first time by a 4 week moving average to smooth the data. Seasonal spikes occur during holiday periods such as Christmas, Thanksgiving and Easter for example. So initial and continuing claims is factored for both seasonal and non seasonal factors.
Calculation of employment rates works based on a covered denominator of 130,128,328. Where does this number come from?
The Bureau of Labor Statistics in their division of Quarterly Census of Employment and Wages factors the total number of jobs in the US as 130,128.328.
The QCEW tracks employment, unemployment and wages as factors to determine how much employers must pay for UI claims.
Approximately 96 % of all US employers are covered under the UI program. Between a small tax called FUTA, Future unemployment tax allowance payed by employers and a small tax payed by recipients, UI program expenses and benefits can be paid to the next set of recipients.
What is not covered under the UI program and not factored in the initial claims reports are those that collect benefits under Emergency Compensation Claims.
This number is lumped together with initial and continuing claims. Exhaustion rates are not factored by the ETA or reflected in the initial claims reports either. That is the domain of the QCEW. Initial and continuing claims is a straight number that records claimants of initial and continuing claims in the UI program.
Brian Twomey is a currency trader and adjunct professor of Political Science at Gardner-Webb University