The latest jobless claims report from the Department of Labor shows no change in the number of initial jobless claims. That number remains steady at 370,000, while the insured unemployment rose slightly to 3,265,000. Looking at the four week moving averages we see that both initial claims and insured unemployment are both down slightly.
The report issued April 28th showed a large decrease in the initial number of claims. While a onetime drop is always a good thing, it can be due to onetime events. After several weeks in a row of the numbers not climbing the employment situation looks more hopeful. As the economy builds strength more people are finding work. A look at the four week moving average shows that there is a consistent downtrend in the number of initial claims. This chart shows a nice visual of that downward trend.
March was a great month for adding jobs. There were several jobless claims reports that showed the lowest numbers during the recovery. During April the claims started to rise until the end of the month when huge strides were made. Now during May those gains are being held. If consumer and employer confidence continue to increase, there should be more reports that look good in the future. Unfortunately it is still too soon to tell if the confidence will remain.
While the labor market may not seem too solid, especially with the worries of high energy costs, inflation, European debt, and a whole host of other factors weighing on people’s minds, it is important to take a step back and look at what it was like a year ago. Last year the report for this point in May there were a seasonally adjusted 418,000 initial jobless claims and the four week moving average showed 434,500. Insured unemployment was at 3,747,000. In just twelve months the initial claims have dropped over 11% and the insured unemployment number has fallen nearly 13%. By keeping the big picture in mind one can help alleviate some of the concerns that there is little progress being made. Small, consistent wins are needed for a healthy recovery.
The initial jobless claims report is issued once per week from the Department of Labor. The report details how many claims from the week prior, and revises numbers from two weeks prior. The report is a great snapshot of the overall employment situation for the country and can help economists and investors see trends and determine the direction of the labor market.