New jobless claims continue to be the most important weekly economic datapoint, as increasing numbers of vaccinated people and outdoor activities have led to an abatement of the pandemic – both new infections and deaths are near their lowest points in a year.
We have hit my objective for new claims to be under 500,000 by Memorial Day. My second objective is for them to be below 400,000 by Labor Day.
New jobless claims declined 34,000 to 473,000. On a unadjusted basis, new jobless claims declined 26,286 to 487,436. The 4 week average of claims also declined by 28,250 to 534,000. All of these were new pandemic lows.
Here is the trend since last August:
Remember that, at the peak of the pandemic lockdowns, new claims were running 6 million to 7 million per week. On the other hand, current claims remain at a level typical of recessions in the 50 years prior to the pandemic:
Continuing claims, which are reported with a one week lag, and lag the trend of intitial claims typically by a few weeks to several months, declined 145,000 to 3,655,000, (blue), but are 3,000 above their pandemic low of 3 weeks ago. On an unadjusted basis (gold) , they declined 86,659 to 3,709,566:
The long term perspective again shows that these are equivalent to the worst levels of most previous recessions:
‘Fessing up, the April jobs number completely blew up my forecast, based on the monthly decline in initial claims, for gains over 1 million. I increasingly suspect that March’s number close to 1 million may have been as much an outlier to the upside as April’s was to the downside.
I continue to think initial jobless claims will continue their recent strong decline, while the failure of continuing claims to follow suit in the past 5 or 6 weeks is genuine concern – and to be honest is at least some evidence that those on the enhanced pandemic benefits are being picky about returning to work.