[Note: I’ll comment on the Q1 GDP report later today or tomorrow.]
New jobless claims will almost certainly continue to be the most important weekly economic data for the next 3 or 4 months, as increasing numbers of vaccinated people and outdoor activities lead to an abatement of the pandemic. Seven weeks ago I set a few objective targets for new claims: to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. This week showed that the first target is clearly in reach.
On an unadjusted basis, new jobless claims declined from 9,486 to 575,350. Seasonally adjusted claims declined by 13,000 to 553,000. The 4 week average of claims also declined by 44,000 to 611,750. All of these were new pandemic lows, after slight upward revisions to last week’s numbers.
Here’s how the trend looks since last August:
The trend since February is a decline of about 75,000 per month.
To put these in perspective, last March and April we were seeing news claims on the order of 6 million to 7 million per week! On a longer term basis (shown below), current levels are equivalent to the worst levels in the “weaker” recessions of 1990 and 2001:
Continuing claims, which are reported with a one week lag, and lag the trend of initial claims typically by a few weeks to several months, also set a new pandemic low on an unadjusted basis, with a decline of 49,902 to 3,790,527, while after seasonal adjustment there was a slight increase of 9,000 to 3,660,000:
The long term perspective again shows that these are equivalent to the worst levels of most previous recessions:
A week from tomorrow is the April jobs report, which I continue to expect to show a gain of well over 1,000,000 jobs, and possibly closer to 2,000,000. Additionally, my concern that new and more infectious variants of COVID might undercut progress with vaccinations has faded, as new infections have declined again to equal the lows of last summer already.