Washington, D.C., USA: in the week ending June 2, the advance figure for seasonally adjusted initial jobless claims was 222,000, a decrease of 1,000 from the previous week’s revised level, the U.S. Department of Labor said Thursday in it’s Unemployment Insurance Weekly Claims Report.
The previous week’s level was revised up by 2,000 from 221,000 to 223,000. The 4-week moving average was 225,500, an increase of 2,750 from the previous week’s revised average. The previous week’s average was revised up by 500 from 222,250 to 222,750.
Seasonally Adjusted Data
The 4-week moving average was 225,500, an increase of 2,750 from the previous week’s revised average. The previous week’s average was revised up by 500 from 222,250 to 222,750.
Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.
The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending May 26, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 26 was 1,741,000, an increase of 21,000 from the previous week’s revised level. The previous week’s level was revised down by 6,000 from 1,726,000 to 1,720,000. The 4-week moving average was 1,728,750, a decrease of 13,250 from the previous week’s revised average. This is the lowest level for this average since December 8, 1973 when it was 1,715,500. The previous week’s average was revised down by 1,500 from 1,743,500 to 1,742,000.
The advance number of actual initial claims under state programs, unadjusted, totaled 191,177 in the week ending June 2, a decrease of 11,669 (or -5.8 percent) from the previous week. The seasonal factors had expected a decrease of 10,910 (or -5.4 percent) from the previous week. There were 212,696 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.1 percent during the week ending May 26, unchanged from the prior week. The advance unadjusted number for persons claiming unemployment insurance, UI, benefits in state programs totaled 1,568,788, a decrease of 5,215 (or -0.3 percent) from the preceding week. The seasonal factors had expected a decrease of 24,083 (or -1.5 percent) from the previous week. A year earlier the rate was 1.3 percent and the volume was 1,751,112.
The total number of people claiming benefits in all programs for the week ending May 19 was 1,600,524, a decrease of 31,381 from the previous week. There were 1,795,803 persons claiming benefits in all programs in the comparable week in 2017.
Extended benefits were payable in the Virgin Islands during the week ending May 19.
Initial claims for UI benefits filed by former Federal civilian employees totaled 734 in the week ending May 26, an increase of 80 from the prior week. There were 655 initial claims filed by newly discharged veterans, a decrease of 69 from the preceding week. There were 6,775 former Federal civilian employees claiming UI benefits for the week ending May 19, a decrease of 982 from the previous week. Newly discharged veterans claiming benefits totaled 7,529, a decrease of 182 from the prior week.
The highest insured unemployment rates in the week ending May 19 were in the Virgin Islands (3.9), Alaska (2.6), California (2.0), New Jersey (2.0), Connecticut (1.9), Puerto Rico (1.7), Pennsylvania (1.6), Illinois (1.5), Rhode Island (1.5), and Nevada (1.4).
The largest increases in initial claims for the week ending May 26 were in New York (+1,628), Missouri (+1,125), Michigan (+1,023), Illinois (+917), and Tennessee (+748), while the largest decreases were in California (-3,999), Kentucky (-3,755), Pennsylvania (-1,511), Texas (-1,117), and Alabama (-837).
Note that the news release by the U.S. Department of Labor presents the weekly unemployment insurance (UI) claims reported by each state’s unemployment insurance program offices. These claims may be used for monitoring workload volume, assessing state program operations and for assessing labor market conditions. States initially report claims directly taken by the state liable for the benefit payments, regardless of where the claimant who filed the claim resided. These are the basis for the advance initial claims and continued claims reported each week. These data come from ETA 538, Advance Weekly Initial and Continued Claims Report. The following week initial claims and continued claims are revised based on a second reporting by states that reflect the claimants by state of residence. These data come from the ETA 539, Weekly Claims and Extended Benefits Trigger Data Report.
The Dow Jones Industrial Average DJIA, +0.38% and the S&P 500 SPX, -0.07% were set to open higher in Thursday trades right after the release of the Unemployment Insurance Weekly Claims Report showed jobless claims edge lower and layoffs near 50-year low. The 10-year Treasury yield TMUBMUSD10Y, -1.44% rose a basis point to 2.97%.
The fall in the number of Americans filing for unemployment benefits last week, points to a further tightening in labor market conditions.
The robust labor market and firming inflation have cemented expectations the Federal Reserve will raise interest rates next week. Many economists believe the U.S. central bank will hike rates two more times after its June 12-13 policy meeting to prevent the economy from overheating.
The Fed lifted borrowing costs in March and forecast at least two more rate increases for this year.
Why Markets Care About Unemployment Insurance Weekly Claims
Unemployment Insurance Weekly Claims – also called Jobless Claims or Initial Claims – measures the number of individuals who filed for unemployment insurance for the first time during the past week.
Unemployment Insurance Weekly Claims is the nation’s earliest economic data. The market impact fluctuates from week to week – there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes.
The usual effect is that if ‘Actual’ is less than ‘Forecast’, it is good for the dollar and vice versa.
Markets care because although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health since consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country’s monetary policy.
An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility.
Continued Weeks Claimed
A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. Continued claims are also referred to as insured unemployment. The count of U.S. continued weeks claimed is also a good indicator of labor market conditions.
Continued claims reflect the current number of insured unemployed workers filing for UI benefits in the nation. While continued claims are not a leading indicator (they roughly coincide with economic cycles at their peaks and lag at cycle troughs), they provide confirming evidence of the direction of the U.S. economy
Seasonal Adjustments and Annual Revisions
Over the course of a year, the weekly changes in the levels of initial claims and continued claims undergo regularly occurring fluctuations. These fluctuations may result from seasonal changes in weather, major holidays, the opening and closing of schools, or other similar events. Because these seasonal events follow a more or less regular pattern each year, their influence on the level of a series can be tempered by adjusting for regular seasonal variation. These adjustments make trend and cycle developments easier to spot. At the beginning of each calendar year, the Bureau of Labor Statistics provides the Employment and Training Administration (ETA) with a set of seasonal factors to apply to the unadjusted data during that year. Concurrent with the implementation and release of the new seasonal factors, ETA incorporates revisions to the UI claims historical series caused by updates to the unadjusted data.