Friday, February 10, 2012

Unemployment claims in Colorado down 40 percent during 4th quarter

Initial claims for unemployment insurance in Colorado fell 40 percent during the fourth quarter of 2011. According to the quarterly report on mass layoffs and unemployment insurance applications, released today by the Bureau of Labor Statistics, the 40 percent drop in Colorado was slightly larger than the 36 percent drop experienced in the United States overall during the same period. Comparing year over year, the number of new unemployment claims has dropped during the past eight quarters.

Extended mass layoffs were down 33 percent from the fourth quarter of 2010, dropping by more than the nation which fell 18 percent during the same period.

"Extended mass layoffs" are a little different from the mass layoffs that are reported on monthly by the BLS. Specifically, an extended mass layoff is "defined by the filing of 50 or more initial claims for unemployment insurance benefits from an employer during a 5-week period, with at least 50 workers separated for more than 30 days. Such layoffs involve both persons subject to recall and those who are terminated."

This quarterly report focuses a little bit more on permanent and longer-term separations while the monthly statistics track all separations regardless of duration.

The report also tracks initial claims for unemployment insurance associated with the extended mass layoffs.

In Colorado, the trend in both mass layoffs and in initial claims continues downward. As can be seen in the first graph, totals for both claims and layoffs are returning to levels commonly reported during the inter-recession period from 2004 to 2007.

This trend largely mirrors the national trend which is also downward. According to the BLS press release:

Over the year ending in the fourth quarter of 2011, the number of private nonfarm extended mass layoff events declined in 13 of the 18 major industry sectors. The construction and the accommodation and food services sectors experienced the largest declines in the numbers of worker separations over the year. Fourteen of the 21 manufacturing subsectors experienced over-the-year decreases in the number of layoff events.

In the second graph, we see the year-over-year changes in initial claims for both the US and Colorado. For the past eight quarters, the year-over-year change in new claims has been down-year-over-year in Colorado. This mirrors the recovery period of 2003 and 2004. The declines follow a period of seven quarters of significant year-over-year increases in claims during 2008 and 2009.

The ongoing declines in mass layoff events and claims suggest a slow and ongoing recovery in the job markets, although the volume in job creation has yet to prove sufficient to absorb new additions to the labor force, and has been noted nationally, the size of the labor force continues to shrink.