Initial claims continue rangebound, while continuing claims continue slow decline, by New Deal Democrat
Initial jobless claims declined 12,000 this week to 375,000, still 7,000 above their best pandemic levels of 368,000 set on June 26 and July 10. The 4 week average of claims increased by 1,750 to 396,250, 11,750 above its pandemic low of 384,500 set on July 10:
Significant progress in the decline of initial claims remains stalled, as it has for the last 2 months.
The story once again is quite different for continuing claims, which declined 114,000 to another new pandemic low of 2,866,000:
This series, which had also been near a stall, now looks to have begun a slowly declining trend on May 29. This may reflect the termination of special pandemic benefits in many States, the impact of $15 minimum wages and signing bonuses being offered, or other items.
From the long term perspective, below is the current level of continuing claims (blue), together with the 4 week average of initial claims* (red), and the unemployment rate from last week’s jobs report* (gold)(*adjusted for scale)(all current values = zero). The first two are consistent with earlier in the expansions over the past 40 years, while the unemployment rate is consistent with mid-expansion or later:
The decline in continuing claims is good news, provided those whose claims have ended are able to start new jobs, and not just being arbitrarily tossed to the economic wolves.
I continue to believe that whether claims will continue to stall, reverse, or improve from here is under the control of the Delta variant and whether new vaccinations continue to stall. My best guess is that as to the pandemic August and September will not be good months, as Delta burns through the dry tinder, so I consider it likely that initial claims do not make much more headway.