First Time Jobless Claims Drop 1K

The last look at jobless claims heading into tomorrow's employment report is somewhat favorable, pointing perhaps to only slightly less strength in the labor market. Initial claims in the May 28 week fell 1,000 to a 267,000 level which is very low and the lowest since the April 23 week. The 4-week average fell 1,750 to a 276,750 level that, however, is nearly 20,000 above the month-ago comparison which is a tangibly negative indication.

Continuing claims, where data lag by a week, are also signaling slight month-to-month weakness, up 12,000 in the May 21 week to 2.172 million with the 4-week average also up 12,000 to 2.163 million. The comparison with the month-ago trend, like that for initial claims, points to less strength in the labor market as continuing claims rose slightly more than 20,000. The unemployment rate for insured workers remains unchanged at a very low 1.6 percent.

The Verizon strike of 35,100 workers, which has since been resolved, was never cited by the Labor Department as a factor in the claims data, even though initial claims did spike briefly in early May. There are no special factors in today's report though a number of states, none large, were estimated. Claims are near historic lows right now but it's the month-to-month comparison between May and April that counts for tomorrow's employment report.

Recent History Of This Indicator:
Initial jobless claims rose sharply in late April and through mid-May but edged back to 268,000 in the May 21 week. Forecaster see initial claims coming in little changed at 267,000 in the May 28 week. The Labor Department has not been citing any special factors in this series but Verizon's strike of 35,100 workers, which has since been resolved, is still a possible wildcard that could drive claims higher.