By Dirk van Dijk of Zacks.comNEW YORK ( TheStreet) -- Initial claims for unemployment Insurance climbed by 12,000 last week to 465,000. That is the first increase in five weeks. Since claims can be volatile from week to week, it is better to track the four-week moving average to get a better sense of the trend. It declined by 3,250 to 463,250. After declining sharply in the second half of 2009, the four-week moving average has been stuck in a tight trading range. Just over a month ago, the weekly number hit 500,000 and threatened to break out to the upside from the range, but the decline over the last month brought us down to 450,000 (before being revised up to 453,000), which brought hopes that we might be breaking out to the downside. This week's numbers seem to indicate that neither the hope -- nor the fear -- was justified. We seem to be stuck in a pseudo-recovery. The economy is growing, but not at the sort of rate needed to add a significant number of jobs and to put a dent in the huge army of the unemployed. In hindsight, the run-up to 500,000 seems to be mostly a function of the Census workers being laid off (they are almost all gone now, and the Census was completed quicker, and at less cost than anyone had expected). As that effect waned, we returned to the previous baseline. Relative to a year ago, the four-week moving average is down by 89,000 or 16.1%.
Continuing ClaimsThe data on continuing claims was mixed. Regular continuing claims for unemployment insurance fell by 48,000 to 4.489 million. They are down by 1.578 million or 26% from a year ago. However, regular claims are paid by state governments, and run out after just 26 weeks. In August, half of all the unemployed had been out of work for 19.9 weeks, and 42% had been out of work for more than 26 weeks. Clearly a measure of unemployment that by definition excludes 42% of the unemployed paints a very incomplete picture. After the 26 weeks are up, people move over to extended benefits, which are paid for by the federal government. These benefits can increase the total amount of time people get benefits up to 99 weeks (depending on the unemployment rate in your state). While regular claims are down, it is mostly from people aging out of the regular benefits and "graduating" to extended benefits. Those rose by 208,000 this week to 5.172 million and are up by 1.316 million, or 34.1% over the past year.