- Number of initial jobless claims dropped below 500k
- Continuing claims increased unexpectedly
After yesterday's ADP report today investors’ attention focused on initial jobless claims print, which is often seen as another hint ahead of Friday's big payrolls data. Today's report showed that initial claims decreased to 498k in the week ended May 1 from upwardly revised 590k recorded in the previous week. Today's report came in below market estimates of 540k and is the lowest level since March 2020, when the pandemic first hit the US economy.
The number of Americans filing new claims for unemployment benefits dropped to lowest level since the pandemic began. However, claims are still well above the 200k to 250k range viewed as consistent with a healthy labor market. Source: Bloomberg
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Create account Try a demo Download mobile app Download mobile appSharpest declines were recorded in Virginia and New York, while only Kentucky reported a considerable increase. At first glance, one can come to the conclusion, the labor market recovery gains steam thanks to ongoing vaccine rollout and massive government financial support. However, continuing claims increased to 3.69 million, from a revised 3.65 million a week before, above market projections of 3.62 million. This was the second straight month of increase in continuing claims. Also the number of Americans which remain on some form of government jobless benefit fell by more than 404k, however still remains above 16 million.
Number of Americans on jobless benefits still remains high, which indicates that the jobs market recovery still has a long way to go before it fully heals from the pandemic damage. Source: Bloomberg via ZeroHedge.
Today’s upbeat report comes a day before NFP data. Economists expect the economy to add another million jobs in a month, with the largest employment growth likely coming from the hospitality sector, which has suffered the most damage from the pandemic. It is worth remembering, that, while last week's data shows stronger growth in the labor market, it will not have an effect on the non-farm payrolls report as it is outside the survey week the Bureau of Labor Statistics uses to compile its estimate.
