The number of persons filing an initial claim for unemployment insurance in the week just ended May 30 declined to 621,000 from 625,000 the prior week. In addition, the number of persons still receiving unemployment insurance dropped to 6.735 million. Both of these figures are seasonally-adjusted.
With initial claims still over 600,000 and continuing jobless claims near the all-time record, the employment market in the United States is clearly still very weak. In fact, the year-on-year comparisons for both initial and continuing claims ticked up last week. There were 257,000 more initial claims last week and 3.6 million more people claiming unemployment insurance than there were at this time last year. Given these data points and other recent employment data, I expect to see 9.2% unemployment reported for May tomorrow.
Nevertheless, there are a number of positive signs in the data, especially when one looks at the unadjusted figures.
Initial jobless claims of 496,822 were below 500,000 for the first time since November 2008. Continuing claims were 6.0 million, the lowest since February 2009. Because we are entering another period of heavy seasonal adjustment just when jobless claims look to have peaked, you should discount the seasonally-adjusted figures heavily. In fact, when one looks at the unadjusted data, not only are the numbers themselves declining, year-over-year figures are declining as well – in contrast to the seasonally-adjusted data.
Going forward, we should look to see whether the Chrysler and General Motors bankruptcies negatively impact these trends in the unadjusted figures. If they do not, I would anticipate a Q4 or Q1 2010 end to the recession as I have previously indicated.
See the attached video for more from Ellen Zentner of Bank of Tokyo-Mitsubishi