PYMNTS MonitorEdge May 2024

Labor Dept Reports Initial Jobless Claims Drop by 10K

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The number of initial claims for unemployment insurance dropped by 10,000 during the week ended Saturday (May 11), reversing about half of the increase that was seen a week earlier.

The total of 222,000 initial claims filed during the week was down from the previous week’s revised figure of 232,000, the Department of Labor (DOL) said in a Thursday (May 16) press release. The previous week’s figure was revised up by 1,000.

The four-week moving average of 217,750 was 2,500 higher than the previous week’s revised average of 215,250, which was revised up by 250, according to the release.

The number of initial claims was 2,000 higher than expected by economists, Reuters reported Thursday. Economists polled by the media outlet had forecast 220,000 claims.

Still, the drop in the number of initial claims reversed nearly half of the increase that was recorded at the beginning of May and indicated that the labor market remains “fairly tight,” the report said.

This news comes about a week after the University of Michigan’s Index of Consumer Sentiment reported that consumers were souring about the near-term outlook on job prospects as well as inflation and interest rates.

That index declined about 13% in May, measured month over month, and dropped to the lowest level seen in six months.

“While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions,” Surveys of Consumers Director Joanne Hsu said in a statement released Friday (May 10).

In comments supplied to the DOL, the state with the greatest decrease in the number of initial claims filed during the week ended May 4, Iowa, attributed the change to fewer layoffs in the manufacturing industry, according to the press release.

The state with the greatest increase in initial claims during that week, New York, pointed to layoffs in three industries: transportation and warehousing; accommodation and food services; and educational services.

The DOL also reported Thursday that the insured unemployment rate was 1.2% for the week ended May 4, unchanged from the previous week’s rate, which was unrevised.

The insured unemployment number for that week was 1,794,000, which was 13,000 higher than the previous week’s revised figure of 1,781,000. The figure for the previous week was revised down by 4,000, per the release.