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 filed by the newly unemployed in the week ending January 5 increased by 4,000 claims from the previous week’s level to 371,000 claims. Initial claims have been increasing for the past 4 weeks, indicating that the job market recovery remains modest. The level of claims remains below the alarm threshold of 400,000 and has been almost unchanged over the past two years, which indicates that unemployment is, at least, not worsening.
- Meanwhile, as December 29, the number of continued claims which represent people who have been unemployed for two weeks or more continuously stood at 3.109 million, down by 127,000 from the previous week of December 22. A drop in the number of continued claims represents either the unemployed who no longer filed a claim because they have found work or those who have exhausted the maximum number of weeks to claim regular and extended benefits. Under the “fiscal cliff” deal, Congress extended the funding for the federally funded extended benefits, which would have expired January 2, 2012, for another year.
- Although the “fiscal cliff” has been avoided, other fiscal issues are yet to be resolved, such as the debt ceiling issue as well as measures to trim government spending. Under this scenario, NAR expects the economy to post modest growth of 2.3 percent in 2013, which should generate about 2 million jobs and keep the unemployment rate to 7.8 percent. The modest gains in employment, coupled with continued low interest rate and improving house prices, can sustain 5.08 million of existing home sales.