Jobless claims point to further employment declines in May
|Three million initial jobless claims were filed the week ended May 9. This was worse than consensus, as the rate of decay in new claims has declined. We note, however, that continuing claims just barely rose.
Initial Claims Remain High, but Continuing Flat
Initial jobless claims declined for the sixth straight week from their peak of 6.8 million at the end of March, but the rate of decay appears to be stalling. The three million claims filed last week brings the eight-week total to 36.5 million.
The persistence of seven-digit initial claims figures is discouraging, but there was a major bright spot — continuing claims, which lag a week, were essentially flat, at 22.8 million.
The May Nonfarm Report Should Be Better Than April
Continuing claims serve as a gauge of (1) how quickly the economy can ramp up after states ‘re-open' and (2) the efficacy of the PPP.
The plateau in continuing claims is an early sign that employers are calling back employees. New hires nearly offset layoffs.
10 million initial claims have been filed since the April nonfarm survey, but evidently hiring has begun to pick back up. The net loss in May employment should therefore be much lower.
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