Initial jobless claims have been on a roller-coaster ride of ups and downs, but a Labor Department report released today is positive news for the labor market. After jumping up a revised 10.7% the previous week, initial jobless claims dropped 6.3% to 340,000 for the week ending May 18.
Analysts were pleasantly surprised by the numbers, having expected only a slight unrevised 4.2% decrease to 345,000. Initial claims hit an unrevised record low for the recovery three weeks ago, and this newest data points to the possibility that claims are trending lower.
Source: Author, data from Labor Department.
With high volatility recently, the four-week moving average squeaked out a 0.1% drop to 339,500. With decreases across the board, both the most recent week's number and the moving average clock in solidly below 400,000, a cutoff point that economists consider a sign of an improving labor market.
On a state-by-state basis, not a single state recorded a decrease of more than 1,000 initial claims for the week ended May 11 (most recent available data, when claims jumped 10.7%). For the same week, five states registered increases of more than 1,000. California took the cake with a 15,060 initial claims jump due primarily to service sector layoffs. North Carolina added 1,826, while Mississippi, Florida, and Georgia all clocked in the low 1,000s, partially because of construction layoffs.
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