1st-time Unemployment Insurance Claims Edge Up but Remain Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 215,000 1st time claims for unemployment insurance for the week ended May 25, UP 3,000 from the previous week’s upwardly revised 212,000 (from 211,000);
  • The four-week moving average of initial claims FELL 3,750 to 216,750;
  • Four week moving average represented 0.143 percent of employment, DOWN from 0.146 percent the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,657,000 for the week ended May 18, DOWN 26,000 from the previous week’s UPWARDLY REVISED 1,683,000; (from 1,676,000)
  • The four-week moving average of continued claims FELL 3,500 to 1,672,500.

Trends:

  • The week-week increase in initial claims was the first in four weeks;

Data Source: Department of Labor

Image result for unemployment

The weekly report on unemployment insurance claims firmed up data for the reference week used by the Bureau of Labor Statistics for its monthly Employment Situation report, scheduled for June 7. The month-month changes in initial claims and the four-week moving average of claims suggest the 49-year low unemployment rate of 3.6 percent may be in jeopardy.

According to Labor Department data, both initial claims and the four-week moving average  of those claims increased from mid-April to mid-May (coincidentally by the same amount, 19,000). The increases mean unemployment grew from mid-April to mid-May which would lead to a higher unemployment rate, absent significant hiring. Some major firms announcement large-scale layoff plans during the period, also suggesting the unemployment rate rose.

On the hiring side, the reference week comparisons for weekly and four-week moving average data provide mixed signals. The weekly continued claims report rose 3,000 in the month but the four-week moving average dropped 15,000.

The primary exit from continued receipt of unemployment insurance is getting a job so the drop in the moving average hints at an increase in hiring. The jobs data come from the “Current Employment Statistics” (CES) survey which surveys employers while the employment/unemployment data is from the “Current Population Survey” (CPS) of households, relying on self-description of whether an individual is employed. An individual with two jobs is counted twice in the CES but only once in the CPS.

You can hear Mark Lieberman tomorrow and every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124.

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