Jobless claims: Another 1.29 million Americans expected to have filed for unemployment benefits
A handful of recent economic data pointed toward a quicker-than-expected recovery, and the weekly initial jobless claims report Thursday will provide investors with additional clues on the state of the U.S. labor market.
Another 1.29 million Americans are expected to have filed for unemployment benefits in the week ending June 13. In the prior week, there were 1.54 million jobless claims, and it marked 10 consecutive weeks of deceleration. Over the past 3 months, more than 44 million Americans have filed for unemployment insurance.
Continuing claims, which lags initial jobless claims data by one week, is expected to total 19.85 million in the week ending June 6, following 20.93 million in the prior week.
Initial jobless claims data isn’t necessarily a perfect indicator of the U.S. labor market, but it still is useful, according to Wells Fargo Securities. “Over-reliance on jobless claims led every forecaster to miss the increase in May nonfarm employment, but claims are still a useful indicator.”
“Initial claims the week ended June 6 fell 19% from the prior week to 1.5M, the largest percentage decrease since April 11. Continuing claims the week ended May 30 fell by 340K t0 20.9M, only the second decrease since the crisis began. The decrease would have been larger if not for outsized increases in California, Florida and Oregon. But both of these numbers are still horrific,” the firm added.
UBS economist Seth Carpenter noted that recent high frequency data has indicated that the rate of job layoffs continues to slow. “We think PPP loans and the reopening policies are continuing to support the labor market data. The drop in initial claims would be larger except a handful of states have chronically high layoff rates.”
Pandemic Unemployment Assistance (PUA) program claims, which include those who were previously ineligible for unemployment insurance such as self-employed and contracted workers, will be closely monitored in Thursday’s report.
PUA claims totaled 705,676 on an unadjusted basis in the week ending June 6, down from the prior week’s 796,813.
“We are watching to see if the slow down continues in Pandemic Unemployment Assistance (PUA) claims, which extend benefits to the self-employed and others not eligible for regular UI benefits. Both the continuing and initial PUA claims fell [last] week which suggest re-employment trends are occurring across industries,” Carpenter said in a note June 12.