The bottom line for both initial and continued claims this week is simple: unadulterated, absolute good news.
Initial jobless claims declined 29,000 to 348,000, 20,000 below their previous pandemic low. The 4 week average of claims declined by 19,000 to 377,750, 6,750 below its previous pandemic low of 384,500:
Significant progress in the decline of initial claims had stalled for the last 2 months, but as of this week, that has ended.
The story is the same for continuing claims, which declined 79,000 to another new pandemic low of 2,820,000:
This continues this series’ recent declining trend that began on May 29. As I have noted before, 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 early- to mid-expansions over the past 40 years, while the unemployment rate is consistent with mid-expansion or later:
Last week I wrote that the trend in claims was “under the control of the Delta variant . . . . , [because of which] I consider it likely that initial claims do not make much more headway.” Barring a huge upward revision next week, I was wrong. And for good news, I am happy to have been wrong, and I hope it continues.