Jobless Claims Drop More than Expected, At Five-Year Low

Perhaps last week's jump in jobless claims wasn't anything to be concerned about. In the week ending May 18, the Department of Labor reported that jobless claims fell 23,000 to 340,000, below analysts' expectations for a 345,000 print on new claims. Claims for the previous week were revised up to 363,000 from 360,000. The 4-week moving average was 339,500, a decrease of 500 from the previous week's revised average of 340,000. Claims are close to a five-year low. Jobless claims are often volatile from week to week, so many analysts prefer to focus on the 4-week moving average, which smooths out volatility from week to week.

The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending May 11, unchanged from the prior week's revised rate. The advance number for seasonally adjusted insured unemployment during the week ending May 11 was 2,912,000, a decrease of 112,000 from the preceding week's revised level of 3,024,000. This is the lowest number of continuing claims since March 2008. The 4-week moving average was 2,995,250--a decrease of 23,750 from the preceding week's revised average of 3,019,000.

Clearly, jobless claims are moving in the right direction. California, however, posted a large jump in new claims. The Labor Department reported nothing unusual in the claims data and that no states were estimated.

States reported 1,776,686 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending May 4, a decrease of 15,415 from the prior week. There were 2,630,544 persons claiming EUC in the comparable week in 2012.

The total number of people claiming benefits in all programs for the week ending May 4 was 4,745,266, a decrease of 98,540 from the previous week. There were 6,168,434 persons claiming benefits in all programs in the comparable week in 2012. Note that some of these people may have dropped off unemployment rolls due to finding a job while others may have seen their benefits expire with the sequester limiting the duration of some benefits.

The highest insured unemployment rates in the week ending May 4 were in Alaska (5.0), Puerto Rico (4.4), California (3.3), New Jersey (3.2), Connecticut (3.1), New Mexico (3.1), Pennsylvania (3.0), Nevada (2.9), Oregon (2.9) Illinois (2.8), and Wisconsin (2.8).

The largest increases in initial claims for the week ending May 11 were in California (+15,060), North Carolina (+1,826), Mississippi (+1,341), Florida (+1,329), and Georgia (+1,118), while the largest decreases were in New Mexico (-754), Oregon (-751), New Jersey (-747), Kentucky (-683), and Tennessee (-488).