The Department of Labor announced this morning a slight increase in the 4-week moving average of unemployment insurance claims. In each of the past five recessions, the recovery period, as identified by The National Bureau of Economic Research, started eight weeks after the peak in UI claims. This morning's announcement confirms the generally acknowledged posture of the US labor market and economy as a whole – the economy is still shrinking at a stable pace as analysts are watchful for the first signs of an uptick.
On a seasonally unadjusted basis, the number of new UI claims fell by about 42,000. This is mostly explained by the 4-day week caused by Memorial Day. Correspondingly, the number of new job ads fell by 100,000 from 741,000 last week. HR departments post fewer jobs when they're in the office four days instead of five.
As discussed last week, we expect a jump of 10% in new job ads the first week of June. A jump of less than 64,000 new job ads would suggest that new UI claims would increase, again, on a seasonally adjusted basis.