Initial jobless claims fell 29,000 to a seasonally-adjusted 469,000 from a revised 498,000 the prior week. While the fall is certainly welcome, initial jobless claims remain very high more than two years after the recession began in December 2007. Moreover, the four-week average is still quite elevated at 470,750.
The biggest point of weakness in this week’s report was the continuing claims numbers. There are still a seasonally-adjusted 4.5 million people on unemployment benefits. When looking at the raw numbers, this jumps to 5.6 million. Furthermore, there are an additional 5.7 million people on extended benefits, bringing the total on the unemployment rolls to 11.3 million.
Clearly, the labor market is weak because of a lack of hiring. However, layoffs are still happening at a still massive clip. Unless this changes, I expect the jobs picture to weigh heavily on GDP in the second half of the year.
Source
Unemployment Insurance Weekly Claims Report – ETA, U.S. Department of Labor