Frictional Unemployment


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Finding a job can be kind of like dating. When a new graduate enters the labor market, she may have the opportunity to enter into a longterm relationship with several companies that aren’t really a good fit. Maybe the pay is too low or the future opportunities aren’t great. Before settling down with the right job, this person is still considered unemployed. Specifically, she’s experiencing frictional unemployment.
In the United States’ dynamic economy, this is a common state of shortterm unemployment. Companies are often under high levels of competition and frequently evolve. They go out of business or have to lay off workers. Or maybe the worker quits to find a better position. In fact, millions of separations and new hires occur every month accompanied by short periods of unemployment.
Frictional unemployment helps allocate human capital (i.e. workers) to its highest valued use. Hopefully, workers are similarly finding themselves with more fulfilling jobs. Even when it’s caused by an event such as a firm going out of business, frictional unemployment is a normal part of a healthy, growing economy.
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Frictional Unemployment

Unemployment Insurance Weekly Claims – April 15, 2021


Unemployment Insurance Weekly Claims April 15, 2021.
SEASONALLY ADJUSTED DATA.
In the week ending April 10, the advance figure for seasonally adjusted initial claims was 576,000, a decrease of 193,000 from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week’s level was revised up by 25,000 from 744,000 to 769,000. The 4week moving average was 683,000, a decrease of 47,250 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised up by 6,500 from 723,750 to 730,250.
The advance seasonally adjusted insured unemployment rate was 2.7 percent for the week ending April 3, an increase of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending April 3 was 3,731,000, an increase of 4,000 from the previous week’s revised level. The previous week’s level was revised down by 7,000 from 3,734,000 to 3,727,000. The 4week moving average was 3,763,000, a decrease of 98,000 from the previous week’s revised average. This is the lowest level for this average since March 28, 2020 when it was 3,611,750. The previous week’s average was revised down by 1,000 from 3,862,000 to 3,861,000.
UNADJUSTED DATA.
The advance number of actual initial claims under state programs, unadjusted, totaled 612,919 in the week ending April 10, a decrease of 152,833 (or 20.0 percent) from the previous week. The seasonal factors had expected an increase of 39,687 (or 5.2 percent) from the previous week. There were 4,897,867 initial claims in the comparable week in 2020. In addition, for the week ending April 10, 53 states reported 131,975 initial claims for Pandemic Unemployment Assistance.
The advance unadjusted insured unemployment rate was 2.8 percent during the week ending April 3, unchanged from the prior week. The advance unadjusted level of insured unemployment in state programs totaled 3,936,696, a decrease of 87,991 (or 2.2 percent) from the preceding week. The seasonal factors had expected a decrease of 91,905 (or 2.3 percent) from the previous week. A year earlier the rate was 8.5 percent and the volume was 12,445,532.
The total number of continued weeks claimed for benefits in all programs for the week ending March 27 was 16,934,061, a decrease of 1,235,856 from the previous week. There were 8,196,826 weekly claims filed for benefits in all programs in the comparable week in 2020.
During the week ending March 27, Extended Benefits were available in the following 16 states: Alaska, California, Colorado, Connecticut, District of Columbia, Illinois, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Texas, and the Virgin Islands.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,110 in the week ending April 3, a decrease of 72 from the prior week. There were 570 initial claims filed by newly discharged veterans, an increase of 12 from the preceding week.
There were 16,615 continued weeks claimed filed by former Federal civilian employees the week ending March 27, a decrease of 538 from the previous week. Newly discharged veterans claiming benefits totaled 7,851, a decrease of 142 from the prior week.
During the week ending March 27, 51 states reported 7,053,575 continued weekly claims for Pandemic Unemployment Assistance benefits and 51 states reported 5,160,267 continued claims for Pandemic Emergency Unemployment Compensation benefits.
The highest insured unemployment rates in the week ending March 27 were in Nevada (5.2), Connecticut (5.0), Alaska (4.7), Pennsylvania (4.6), Illinois (4.3), New York (4.1), Rhode Island (4.0), District of Columbia (3.9), Massachusetts (3.8), and California (3.7).
The largest increases in initial claims for the week ending April 3 were in California (+39,136), New York (+16,771), Oklahoma (+4,615), Michigan (+3,364), and Tennessee (+3,257), while the largest decreases were in Alabama (13,318), Ohio (9,358), Georgia (5,659), Kentucky (3,415), and Texas (3,325).

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Unemployment Insurance Weekly Claims -  April 15, 2021

Unemployment Explained


What is unemployment? Find out in the IMF’s Back to Basics video series: https://youtu.be/mR32kHBKhQE
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Unemployment Explained

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04 UNDERSTANDING ECONOMICS: UNEMPLOYMENT


04 UNDERSTANDING ECONOMICS: UNEMPLOYMENT\r
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Text from vid:\r
Unemployment. Unemployment is defined as people who are willing and able to work, but do not currently have a job.\r
To be counted as employed, a person must be working, even if only parttime, or be absent from work due to illness, vacation, or a labor dispute.\r
Because parttime jobs are counted as employed, people who take parttime jobs while looking for fulltime employment are classified as employed.\r
To be counted as unemployed, a person cannot have a job of any kind and must be actively looking for work.\r
Because of the benefits, people will sometimes declare themselves as unemployed who are not actually looking for work.\r
All persons over the age of 16 that do not have a job and are not seeking one are declared as not in the labor force.\r
As you can see, the employment numbers can be a bit misleading, because some people are declared employed who are still looking for fulltime work, some people are declared unemployed who are not really seeking work but still want to collect the benefits, and some people are declared not in the labor force because there are no jobs available so they simply gave up looking for work.\r
Unemployment statistics are reported by the Department of Labor. There are several unemployment reports from the Department of Labor as well as other sources that we will cover in the section on economic data.\r
Frictional unemployment. People are frictionally unemployed when they are in between jobs or seeking work for the first time.\r
Because there will always be a certain number of people changing jobs, or a certain number of people seeking work for the first time, there will always be a certain level of frictional unemployment.\r
Therefore, full employment means there is still an acceptable level of unemployment in the country. This is sometimes referred to as an ideal employment level.\r
There is some debate on the acceptable level of employment to be considered full employment.\r
For example, Lord William Beveridge defined full employment as where the number of unemployed workers equal the number of job vacancies available.\r
However, most economists agree that a level of unemployment around 4 to 5 percent should be considered full employment.\r
Cyclical unemployment. Cyclical unemployment, also known as demanddeficient unemployment, comes from fluctuations in the business cycle.\r
The business cycle is named for the stages an economy goes through. A business cycle generally has four parts: growth, prosperity, decline, and recession.\r
Eventually, a recession will always be followed by expansion. And expansion will always be followed by recession.\r
The full loop of going from recession to growth and back to recession again is called the business cycle. Cyclical unemployment comes from the periods of decline and recession in the business cycle.\r
Structural unemployment. Structural unemployment happens when unemployed workers are unable to fill job openings due to skill mismatch or geographical mismatch.\r
Structural unemployment due to skill mismatch occurs when available workers do not have the skills needed to perform available jobs.\r
Structural unemployment due to geographical mismatch occurs when available jobs are not located near available workers.\r
Seasonal unemployment. Seasonal unemployment occurs when people have jobs for part of the year, but are unemployed part of the year due to seasonal factors.\r
An example might be construction or farm workers who are out of work because of cold weather.\r
There will always be some unemployment because there will always be a certain number of people in the process of changing jobs. There will always be a certain number of people unemployed due to frictional unemployment.\r
However, there are a certain number of things that can be done to minimize unemployment in general. One of these tools is fiscal policy.\r
Fiscal policy is defined as using the governments taxing and spending powers to influence the economy…..\r
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04 UNDERSTANDING ECONOMICS: UNEMPLOYMENT

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