Jobless claims move lower for sixth consecutive week

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Initial jobless claims fell to a seasonally adjusted 2.981 million in the week ended May 9, from the previous week’s upwardly revised level of 3.176 million, originally reported as 3.169 million, the Labor Department said Thursday.

Economists polled by IFR Markets expected 2.500 million claims in the week.

Continued claims rose to 22.333 million in the week ended May 2 from 22.377 million a week earlier.

“It’s disconcerting to see initial claims for unemployment just shy of 3 million in the latest week — that marks eight straight weeks of claims in the 3-7 million range,” said Jefffrey Cleveland, chief economist at Payden & Rygel. “Although the flood of layoffs has abated from the highs, we’re still seeing massive amounts of layoffs. Is the PPP program faulty? Ineffective? Insufficient? All of the above?”

The four-week moving average fell to 3.617 million from the previous week's revised 4.180 million, originally reported as 4.174 million.

“The 10 million total initial jobless claims between April 19 and May 9 points to continued significant increases in unemployment that will be reflected in the May Employment Report,” said Roiana Reid, U.S. economist at Berenberg Capital Markets. “These initial claims numbers are still extremely elevated. In February, the total number of unemployed persons was 5.8 million.”

The insured unemployment rate rose to a record 15.7% for the week ending May 2 from 15.4% a week earlier.

The largest increases in initial claims for the week ending May 2 were in Oklahoma (41,385), Maryland (25,318), New Jersey (16,360), Maine (8,452), and Puerto Rico (4,600).

“The sluggish decline in initial claims supports our expectation for a slow labor market recovery, dependent on health care developments,” Reid said. “We expect the unemployment rate to be more than double its pre-crisis level at the end of 2021. A sluggish labor market recovery will constrain the rebound in consumption, especially of nonessential goods and services.”

The largest decreases in claims were in Florida (258,243), Alabama (45,981), Georgia (38,213), Washington (37,289), and Pennsylvania (33,451).

Payden & Rygel's Cleveland said continued claims was the statistic to watch.

“Continued claims for unemployment insurance, which lag the initial claims figures by a week, appear to be leveling off at 22.8 million through the week of May 2,” he said. “While initial claims captures the gross number of unemployment filings, what we really want to see is folks leaving the UI programs because they are getting rehired or finding new jobs, so continued claims will be key to watch in coming weeks.”

Import/export prices
United States import prices dropped by 2.6% in April, the U.S. Bureau of Labor Statistics reported on Thursday. In March, prices fell 2.4% . Economists polled by IFR Markets expected prices to be 3.2% lower in April.

Prices for U.S. imports also fell 6.8% in the year ended in April, marking the largest 12-month drop since the index declined 8.3% from December 2014 to December 2015.

Export prices fell 3.3% in April, after a 1.7% slide in March. The April drop was the largest one-month decrease in export prices since the index was first published on a monthly basis in December 1988, BLS said. Economists polled by IFR Markets expected prices to go down by 2.2% in April.

Prices for U.S. exports fell 7.0% over the past year, the largest over-the-year decline since a 7.3% drop for the year ended September 2015.

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Economic indicators Jobless claims Employment data