Pretty soon this starts to paint the picture of "we are coming into full employment and can start raising interest rates a little.". Once that happens the market will take a serious cooling off. Crazy dance to play.
New jobless claim fell to a fresh pandemic-era low of 498,000 last week
New weekly jobless claims set a new pandemic-era low last week, falling below 500,000 for the first time since the start of the pandemic, with initial filings trending decidedly lower in recent weeks amid the pick-up in economic activity.
The Department of Labor released its weekly report on new jobless claims Thursday at 8:30 a.m. ET. Here were the main metrics from the report, compared to consensus data compiled by Bloomberg:
Initial jobless claims, week ended May 1: 498,000 vs. 538,000 expected and 553,000 during the prior week
Continuing claims, week ended April 24: 3.690 million vs. 3.620 million expected and 3.660 million during the prior week
Consensus economists expected initial unemployment filings to hold below 600,000 for a fourth straight week, dipping to the lowest level since mid-March 2020. Initial filings have slid over the course of the past year, pulling back sharply from a pandemic-era high of more than 6 million. New claims during the comparable week last year totaled nearly 3 million, but have held below 1 million since August 2020 as layoffs and other separations slowed.
But while new filings decline, an elevated number of Americans remain unemployed. More than 16.5 million Americans were still receiving unemployment benefits across all programs as of mid-April, for a decrease of nearly 1 million from the previous week. That included more than 12 million Americans on the federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation program, which both expire in September. And based on the Labor Department's monthly non-farm payrolls report, the U.S. economy is still more than 8 million jobs short of its pre-pandemic levels from February 2020.
On Friday, the Labor Department will give an updated snapshot of the labor market in April's monthly jobs report. Economists expect to see non-farm payrolls rose by a staggering 1 million during the month, which would mark the most since August. The unemployment rate likely fell to a pandemic-era low of 5.8% from 6.0% in March, but would still remain well above the pre-pandemic level of 3.5%. During the survey week for the monthly jobs report around the 12th of the month, initial jobless claims had dipped to 566,000.
On Wednesday, ADP's closely watched monthly report on private payrolls showed 742,000 jobs were added back in April. While below consensus estimates, the figure still marked the greatest number of jobs added since September. And ADP's numbers have typically undershot the payrolls totals in the Labor Department's monthly jobs report over the past year, suggesting some upside for Friday's report.
This post will be updated with the results of the Labor Department's weekly jobless claims report Thursday morning at 8:30 a.m. ET. Check back for updates.
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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