The Department of Labor released its weekly unemployment insurance claims data, which corroborates our analysis that despite some slippage, the labor market situation has stabilized and is in a position to start improving.
On a seasonally unadjusted basis:
- New Claims increased by 17,612 as Hiring Demand dropped by 16.3% or 122,700 new job ads.
- On a seasonally unadjusted basis, Continued Claims dropped by 34,900 claimants.
However, on a seasonally adjusted basis:
- New Claims dropped by a staggering 52,000 claimants.
- The four-week moving average of New Claims dropped by 10,000 claimants to 606,000.
- Continued Claims increased by 159,000 claimants.
The interpretation of this week's data is well tied together by the Associated Press: "While layoffs are slowing, unemployed workers are having a difficult time finding new jobs." A robust month of May may have helped reduce new claims, but recent slippage in Hiring Demand means that unemployment workers will find it harder to exit UI programs.
The following graph shows the historical relationship between UI claims and WANTED Hiring Demand. The UI Claims axis has been inverted to facilitate analysis.
Click chart to view full size
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Why did jobless claims dip in concert with hiring demand? It seems like when hiring demand decreases, more people are laid off and jobless claims would increase.
Hello Michael -
Thank you for your comment.
The UI Claims axis has been inverted to facilitate analysis. So when the data goes "down" on the graph, UI Claims are actually going up.
We have made that a little clearer in the post now.
Charles Thibault