Economy

Jobless Claims Continue to Show Job Market Struggles in May

Jon C. Ogg

Published: May 19, 2016 11:50 am

Last Updated: January 13, 2020 7:50 am

May has proven to be a hard time for the jobless claims, something that may play into the unemployment report for the month that will be released in two weeks or so. The U.S. Department of Labor showed that jobless claims fell to 278,000 in the week ending May 14.

While this was a drop from the 294,000 reported in the prior week, the reality is that this remains worse than expected by the consensus reports going into the release. Dow Jones had its consensus estimate at 272,000. Bloomberg had its estimate at 275,000, and its Econoday range was 261,000 to 280,000.

The Bureau of Labor Statistics said that no special factors had an impact on this week’s initial claims. Another issue to consider, despite a negative report, is that this marked the 63rd consecutive weekly report where initial jobless claims came in under 300,000, the longest streak since 1973.

The May 14 week is the sample week for the May employment report, and that translates to the comparisons with the sample week of the April employment report as pointing toward less overall strength in the labor market. It is important to realize that the sample week of April’s initial claims were a historic low of 248,000 — some 30,000 under the latest reading.

Another note that was negative for this past week was that the four-week average went up by 7,500 to 275,750.

Continuing jobless claims were down 13,000 to 2.152 million, but this is reported each week with a one-week lag (the week of May 7). Continuing claims have more or less been similar with April’s trends.

Unadjusted data often looks different from the reports that are tracked by economists. On this matter, the Labor Department said:

The advance number of actual initial claims under state programs, unadjusted, totaled 244,797 in the week ending May 14, a decrease of 17,099 (or -6.5 percent) from the previous week. The seasonal factors had expected a decrease of 3,230 (or -1.2 percent) from the previous week. There were 243,612 initial claims in the comparable week in 2015.

The unemployment rate for insured workers is unchanged at 1.6%.

While no special factors have been cited for months now, one might not be able to help but wonder if the cut of 40,000 Verizon workers has had any impact on this weakness.