Unemployment insurance claims eased slightly at end of May

[BumRushDaShow]

Source: Washington Post

Unemployment claims for the last week of May were 1.9 million, the lowest since the coronavirus started spreading widely back in March, a sign that the economy may no longer be in free fall.

The number of those filing for jobless benefits was less than the 2.1 million who filed in the previous week. During the crisis’ worst week for employment at the end of March, nearly 7 million people applied for benefits.

That doesn’t mean the United States has any less deep of a hole to dig itself out of. The weekly numbers on Thursday are still more than double the pre-coronavirus record of 695,000 set in October 1982, as they have been every week since mid-March this year.

More than 40 million people have applied for unemployment benefits during the pandemic, with roughly 21 million receiving them, previously unimaginable figures that wiped out a job market that saw unemployment at historic lows as recently as February. The unemployment rate for May, due out Friday, is expected to be close to 20 percent, a level not seen since the 1930s.

Read more: https://www.washingtonpost.com/business/2020/06/04/unemployment-claims-coronavirus/

[mahatmakanejeeves]

1. They actually released the news about a minute ahead of the embargo time.

Someone goofed.

Good morning. Other than the WaPo, no one seems to cover this right away anymore. I kept looking to see who else had it. I guess it gets tweeted, and the papers take their time writing the stories.

https://www.dol.gov/ui/data.pdf

TRANSMISSION OF MATERIALS IN THIS RELEASE IS EMBARGOED UNTIL 8:30 A.M. (Eastern) Thursday, May 28, 2020

COVID-19 Impact
The COVID-19 virus continues to impact the number of initial claims and insured unemployment.
This report includes information on claimants filing Pandemic Unemployment Assistance and
Pandemic Emergency Unemployment Compensation claims.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS
SEASONALLY ADJUSTED DATA

In the week ending May 23, the advance figure for seasonally adjusted initial claims was 2,123,000, a decrease of 323,000 from the previous week's revised level. The previous week's level was revised up by 8,000 from 2,438,000 to 2,446,000. The 4-week moving average was 2,608,000, a decrease of 436,000 from the previous week's revised average. The previous week's average was revised up by 2,000 from 3,042,000 to 3,044,000.

The advance seasonally adjusted insured unemployment rate was 14.5 percent for the week ending May 16, a decrease of 2.6 percentage points from the previous week's revised rate. The previous week's rate was revised down by 0.1 from 17.2 to 17.1 percent. The advance number for seasonally adjusted insured unemployment during the week ending May 16 was 21,052,000, a decrease of 3,860,000 from the previous week's revised level. The previous week's level was revised down by 161,000 from 25,073,000 to 24,912,000. The 4-week moving average was 22,722,250, an increase of 760,250 from the previous week's revised average. The previous week's average was revised down by 40,250 from 22,002,250 to 21,962,000.

{snip}

[BumRushDaShow]

2. Good morning!

So much going on that I guess they don't think this weekly data report is as important as what is to come tomorrow. That is probably when the bigger news story erupts (unless someone we know decides to manufacture some far-fetched gigantic distraction from it ).

[greenjar_01]

3. Reminder: They had never before gone over 700,000

An unemployment claims number of 1.9 million would have been viewed as utterly catastrophic even three months ago.

[BumRushDaShow]

4. It's still catastropic and I expect tomorrow's UE for May will be as well.

[progree]

5. The unemployment rate was easily above 20% at the end of April

The Bureau of Labor Statistics admits the official unemployment rate is almost 5 percentage points higher than the 14.7% reported due to classification errors of some of the household survey interviewers (making it close to 20%)

https://www.bls.gov/news.release/empsit.nr0.htm (Bureau of Labor Statistics May 8, 2020)

As was the case in March, special instructions sent to household survey
interviewers called for all employed persons absent from work due to coronavirus-related business
closures to be classified as unemployed on temporary layoff. However, it is apparent that not all
such workers were so classified.

If the workers who were recorded as employed but absent from work due to "other reasons" (over
and above the number absent for other reasons in a typical April) had been classified as unemployed
on temporary layoff, the overall unemployment rate would have been almost 5 percentage points higher
than reported (on a not seasonally adjusted basis). However, according to usual practice, the data
from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions
are taken to reclassify survey responses.

And the April numbers come from a sample week of April 12-18. Many more millions of jobs were lost since then, according to the weekly new unemployment claims reports (I'm sure some of those found jobs, but on the other hand, many have been having trouble filing unemployment claims or, in the case of contract workers, may not realize they are eligible, and these have had the most difficulty filing because the past 3 months is the first time in history that the self-employed / gig / contract workers were eligible). And then we have fuckwad state governments like Florida that have made it as difficult as possible to file claims.

Putting all of the above together, it is a virtual certainty that the unemployment rate was over 20% at the end of April.

Note: the unemployment rate coming out tomorrow is NOT a count of people receiving unemployment insurance (that's the biggest myth in labor history). Rather it is from a household survey of 60,000 households conducted during the sample week each month where they ask people if they are working, and if not, do they want a job, are you able and ready to take a job, and have you looked for work in the past 4 weeks (something more active than just reading jobs ads). If the answer to all of the above (jobless, wants work, ready, looked in past 4 weeks) is yes, they are counted as unemployed. Else not.

More Details:
https://www.democraticunderground.com/?com=view_post&forum=1017&pid=581690

Reminder: the unemployment rate coming out tomorrow will be from the Household Survey sample week of May 10 - May 16, if they follow their usual practice of choosing the sample week that includes the 12th.

[progree]

6. Reminder: there are two unemployment rates of greatest interest coming out tomorrow:

U-3: unemployment rate - the official headline number. Counts those who have looked for work in the past 4 weeks (and want work and are ready blah blah). All part-timers are considered employed (and thus not unemployed).

Seasonally adjusted: http://data.bls.gov/timeseries/LNS14000000 (14.7% in April, but would be nearly 5% higher except for classification errors)

Not seasonally adjusted: http://data.bls.gov/timeseries/LNU04000000 (14.4% in April, but would be higher etc. etc.)

U-6: "underemployment rate": counts jobless people who have looked for work in the past 12 months, plus part-timers who want full time work (and who want work and all that)

Seasonally adjusted: http://data.bls.gov/timeseries/LNS13327709 (22.8% in April)

Not seasonally adjusted: http://data.bls.gov/timeseries/LNU03327709 (22.4% in April)

What the U-6 numbers means, that when the classification errors are corrected, more than 1/4 of the labor force is underemployed or unemployed. And the underemployed doesn't include those who are working crap jobs way beneath their training, education, and abilities. That's considered life in the big city, not underemployment.

[BumRushDaShow]

7. Good morning!

Thanks for including that info here. Have speculated some "distraction" might happen tomorrow, but we'll see.

[progree]

8. Good morning! Can you believe that the unemployment claims was more than expected, but Dow &

S&P 500 are up a bit. NASDAQ hit an all-time intraday high this morning.

https://finance.yahoo.com/news/coronavirus-covid-weekly-initial-jobless-claims-may-30-181528904.html

An additional 1.877 million Americans filed for unemployment benefits in the week ending May 30, exceeding economists’ estimates for 1.843 million initial jobless claims during the week. The prior week’s figure was revised higher to 2.13 million from the previously reported 2.12 million.

... After seeing a decline in the previous week’s report, continuing claims, which lags initial jobless claims data by one week, increased to 21.49 million in the week ending May 23, from 20.84 million in the previous week. Consensus expectations were for 20 million continuing claims.

... Pandemic Unemployment Assistance (PUA) program claims, which include those who were previously ineligible for unemployment insurance such as self-employed and contracted workers, fell significantly to 623,073 in the week ending May 30 from the prior week’s 1.3 million.

... (tomorrow's unemployment / jobs report) The U.S. economy is estimated to have lost 8 million nonfarm payrolls, down from 20.54 million job losses in the prior month. The unemployment rate likely skyrocketed to nearly 20% during the month, up from 14.7% in April.

The article includes a graph of unemployment claims with all the weekly numbers too since week ending March 15.

Oops, update 1118 AM ET - Dow, S&P 500, and Nasdaq all down a bit.

[BumRushDaShow]

9. We've seen the counter-intuitive reaction by the markets with respect to the UE over the years

where when unemployment goes up, the market goes up. It usually ends up being some other indicator that might cause the markets to drop (like GDP outlooks, etc).