Wall Street Greek: Weekly Jobless Claims Report

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We received some more of that "at least its not as bad as before" kind of data again this morning in the weekly jobless claims report. Despite still shedding jobs at a breathless pace, there's clearly a favorable trend underlying the numbers now.

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Weekly Jobless Claims Report

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Today's report covered new benefits filers from the week ending on May 2nd. According to the Department of Labor, only 601,000 Americans filed for unemployment benefits this time around. These first-time filers compared against the prior week's revised count of 635K. Because the claimant count is down from the prior week, which was down from the week before that, both economists and the market were enthused with the news. The fact is, weekly claims have been trending down sequentially since topping out at 674K during the last week of March. Looky here:

Week Ending

New Claims Filings

May 2

601K

April 25

635K

April 18

645

April 11

613K

April 4

660K

Mar 28

674K

We should note that the 613K figure (off-trend) in the table above appears to have been impacted by Easter.

Putting Jobless Claims Into Perspective

While this trend is enthusing, before you throw your "recession is over party," consider a few important facts. To put this into proper perspective, only 372,000 individuals filed for unemployment benefits at this time last year; and recall that the comparable period was not the happiest of times either. The current rate, still above 600K, represents one of the highest totals we've seen in years.

These newly unemployed folks join the ranks of the veteran jobless, which unfortunately continues to climb. Insured Unemployment reached 6,351,000 in the last period measured, which was the week ending on April 25. That was higher than the prior week level of 6,295,000, which was likewise higher than the week before that. Furthermore, while the four-week moving average for new claims filers declined to 623,500, the same average for insured employment increased to 6,207,250, or 4.8%. These still unemployed folks, and the underemployed masses working part-time jobs and barely eating, will likely continue to impact consumer spending and overall GDP.

Let's Give the Deserved High Note Its Due

The stock market is a leading indicator, and unemployment is a lagging indicator. This change in pace of deterioration is a positive factor despite the deterioration. What's more, the trend of improvement seems to indicate that there's a chance the worst is over or nearly over for the economy (until the economic fishtail kicks in anyway). Less people are losing their jobs, which means companies are lean enough to handle demand productively. To that end, today's productivity numbers showed an improvement, which also indicates corporations are getting more out of their employees per unit of production. They may be getting the most they can out of them in fact, and perhaps an increase in demand might require new hiring. We can read into a slew of data, and the story goes, the economy appears to be stabilizing. So, you are right to celebrate, but keep your eye on the emergency exit just in case.

Interesting State Employment Data

The highest insured unemployment rates in the week ending April 18 were in Oregon (7.6 percent), Michigan (7.2), Wisconsin (6.6), Pennsylvania (6.5), Idaho (6.4), Nevada (6.4), Rhode Island (6.1), New Jersey (5.8), 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).