Continued Claims for Unemployment Insurance Hit New Post-Recession Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 211,000 1st time claims for unemployment insurance for the week ended May 5 UNCHANGED from the prior week’s unrevised report;
  • The four-week moving average of first-time claims FELL 5,500 to 216,000;
  • Four week moving average represented 0.139 percent of employment, DOWN from 0.143 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,790,000 for the week ended April 21, UP 21,000 from the previous week’s UPWARDLY REVISED 1,769,000;
  • The four-week moving average of continued claims FELL 22,000 to 1,812,500.

Trends:

  • The four-week moving average of initial claims for unemployment insurance fell to its lowest level since December 20, 1969.
  • The number of first-time claims for unemployment insurance remained below 250,000 for the 17th straight week. [350,000 is considered by labor economists to be the “tipping point” between a robust and weak labor market.]
  • While the number of continued claims increased, the four-week moving average of continued claims fell to its lowest level since This is the lowest level for this average since December 29, 1973, when it was 1,784,250.

Data Source: Department of Labor https://oui.doleta.gov/press/2018/051018.pdf

Image result for unemployment insurance claims data

The strong report on unemployment insurance claims followed the positive report Tuesday of the Job Openings and Labor Turnover Survey (JOLTS) which showed the strongest month-month increase in job openings in March in nearly a year.

Job Openings in March of this year increased 472,000 to 6.55 million, the highest total on record. It stands to reason then continued claims for unemployment insurance – a surrogate for hiring — would drop with more opportunities for employment. Indeed, the ratio of unemployed to job openings fell in March to 1.01, also the lowest on record.

And, as a further sign of the strong labor market, the ratio of “quits” (voluntary departures other than retirement) to layoffs and discharges rose to 2.14, a record high as more workers felt secure enough in their ability to find new employment. The JOLTS data provided further background to eh employment situation report for April which showed the unemployment rate dropped to 3.9 percent.

And the continued claims for unemployment insurance data suggested further improvement, dropping again to new post-recession lows.

With the ongoing strength in the labor market, the Federal Open Market Committee to remains on track for further interest rate increases despite Thursday’s report CPI inflation rose to 2.5 percent in April.

You can hear Mark Lieberman 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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