Did Millennials Take A Step Back?

woman in red jacket holding white smartphone

The labor market continued to get better in the week ending May 29. Seasonally adjusted jobless claims fell 20,000 to 385,000 which was 15,000 below the consensus. The four-week average fell 30,000 to 428,000. It’s inching closer to our projection for it to fall below 300,000 by the end of the year. In the week of May 22, continued claims rose from 3.602 million to 3.771 million which as the highest reading since March 13. This is probably a blip that will reverse course next week.

Non-seasonally adjusted pandemic claims fell 2,000 to 76,000. This program is going away very soon. In June, 4.1 million people will come off pandemic benefits. Let’s see how that impacts job creation and consumer spending in the next few weeks. We think job creation will pick up in June. The savings rate should decline which might make up for the decline in benefits. The economy is a few months away from complete normalcy.

As you can see from the table below, total claims in the week of May 15 fell 366,000 to 15.4 million. In a couple months this will be below 10 million as the pandemic programs run their course. We will probably stop following this statistic in July. We will just study initial and continued claims. Soon initial claims will be back to its normal reliability which is important since it has a high correlation with stock returns.

Modest Wealth Declines

As you can see from the chart below, at age 40 each subsequent generation has had a similar income, an increase in debt, and a decline in wealth. The increase in debt for millennials is likely due to student loans.

Median wealth at age 40 has declined since 1989; incomes have been stagnant; debt has increased @federalreserve @biancoresearch pic.twitter.com/hArNMVixDu

— Liz Ann Sonders (@LizAnnSonders) June 4, 2021
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