When 3.8 Million Jobless Claims Sounds Like Good News

It’s quite sad to see this, but 30 million or so people have filed for weekly jobless claims since the beginning of March as the recession continues to rage. The U.S. Department of Labor reported that 3.839 million people filed for unemployment benefits in the week ending April 25.

The report was down from 4.44 million in the previous week (revised from 4.427 million at first look). Econoday’s consensus estimate was 3.5 million, but Dow Jones (Wall Street Journal) had a consensus estimate of about 3.2 million in weekly claims.

The Labor Department’s four-week moving average was down by 757,000 to 5,033,250 from the previous week’s revised average. The previous week’s four-week average was revised up by 3,750 to 5,790,250.

The advance seasonally adjusted insured unemployment rate was up 1.5 percentage points to 12.4% for the week ending April 18. According to the Bureau of Labor Statistics (BLS), this was the highest level of the seasonally adjusted insured unemployment rate seen in its entire history since it started using seasonally adjusted data.

Continuing jobless claims for the week of April 18, which is the number of people claiming benefits for two weeks or more and reported with a one-week lag, rose by 2.174 million to 17,992,000. This was also the highest level reported since the Labor Department started tracking it.

While seasonality issues may adjust the reporting, some economists are just wanting to see the unadjusted data to better capture the raw number of people filing for unemployment benefits. The BLS said:

The advance number of actual initial claims under state programs, unadjusted, totaled 3,489,261 in the week ending April 25, a decrease of 792,387 (or -18.5 percent) from the previous week. The seasonal factors had expected a decrease of 244,285 (or -5.7 percent) from the previous week. There were 204,755 initial claims in the comparable week in 2019.

The advance unadjusted insured unemployment rate was 12.2 percent during the week ending April 18, an increase of 1.0 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 17,776,006, an increase of 1,498,784 (or 9.2 percent) from the preceding week. The seasonal factors had expected a decrease of 648,558 (or -4.0 percent) from the previous week. A year earlier the rate was 1.1 percent and the volume was 1,647,874.

Stocks traded lower on Thursday, with the S&P 500 down 1.2% and the Dow Jones industrials down 1.5%. Then again, the S&P 500 had rallied more than 30% since the March 23 lows in the midst of the panic-selling pressure. In fact, the S&P 500 a day earlier was down only 13% from its all-time highs seen in February.

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