May 2021 Initial Unemployment Claims Rolling Average Improvement Continues

Market expectations for weekly initial unemployment claims (from Econoday) were 425 K to 475 K (consensus 450 K), and the Department of Labor reported 406,000 new claims. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 504,750 (reported last week as 504,750) to 458,750

Analyst Opinion of Initial Unemployment Claims

Job's loss since the start of the pandemic is now 83,186,000. Many in this number are now employed or have dropped out of the workforce as all programs continuing claims number is 15,802,126, down from last week's 15,977,381

It should be pointed out that Econintersect watches the year-over-year change in the 4-week moving average. There is always some seasonality that migrates into the seasonally adjusted data, and year-over-year comparisons help remove some seasonality. The four-week rolling average of initial claims is 80 % LOWER than one year ago (versus the 81 % lower last week).

Claim levels before the coronavirus pandemic were at 40-year lows (with the normal range around 350,000 weekly initial unemployment claims of levels seen historically during times of economic expansion - see chart below).

From the Department of Labor:

In the week ending May 22, the advance figure for seasonally adjusted initial claims was 406,000, a decrease of 38,000 from the previous week's unrevised level of 444,000. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The 4-week moving average was 458,750, a decrease of 46,000 from the previous week's unrevised average of 504,750. This is the lowest level for this average since March 14, 2020 when it was 225,500.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending May 15, a decrease of 0.1 percentage point from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 15 was 3,642,000, a decrease of 96,000 from the previous week's revised level. The previous week's level was revised down by 13,000 from 3,751,000 to 3,738,000. The 4-week moving average was 3,675,000, a decrease of 2,750 from the previous week's revised average. The previous week's average was revised down by 3,250 from 3,681,000 to 3,677,750.

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