Initial Jobless Claims Climbed to a New Record High

The number of Americans filing initial claims for unemployment benefits fell to 601,000 for the week ending May 2, a steep 34,000 decrease from last week’s revised level of 635,000, the Labor Department reported. This marks the 14th consecutive week filings surpassed 600,000 threshold. The 4-week moving average- which smoothes out weekly volatility- was 623,500, a decrease of 14,750 from the previous week’s revised average of 638,250.

From DOL: The advance number for seasonally adjusted insured unemployment during the week ending April 25 was 6,351,000, an increase of 56,000 from the preceding week’s revised level of 6,295,000. The 4-week moving average was 6,207,250, an increase of 125,250 from the preceding week’s revised average of 6,082,000.

The recession continues to force business owners to reduce their headcount in order to bring down overhead spending. The highest insured unemployment rates in the week ending April 18 were in Oregon 7.6% ; Michigan 7.2% ; Wisconsin 6.6% ; Pennsylvania 6.5% ; Idaho 6.4% ; Nevada 6.4% ;, Rhode Island 6.15 ; New Jersey 5.85 ; Vermont 5.8%  and Alaska 5.7%.

The largest increases in initial claims for the week ending April 25 were in Michigan (+9,998), Massachusetts (+4,277), Kentucky (+3,681), North Carolina (+2,549), and New York (+2,219), while the largest decreases were in California (-10,833), Georgia (-4,174), South Carolina (-3,676), Wisconsin (-3,341), and New Jersey (-2,810).

Let’s keep in mind the recessionary peak in the four-week moving average of initial claims has directly preceded the official end date of the recession as set by NBER. For example, initial claims peaked in Oct. 1970. NBER announced recession end date on Nov. 1970…

Initial Claims for Unemployment and Recession End Dates
Initial Claims Peak Recession End Date
February, 1975 March, 1975
October, 1982 November, 1982
March, 1991 March, 1991
October, 2001 November, 2001

Note: Initial Claims for Unemployment Insurance, seasonally adjusted, calculated as four-week moving average

Sources: U.S. DOL ; National Bureau of Economic Research

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