MW: Initial jobless claims fall; ongoing claims set record
WASHINGTON (MarketWatch) -- While first-time claims for state unemployment benefits have declined or been flat over the most recent four weeks of data, ongoing claims have continued to reach fresh weekly highs, the Labor Department reported Thursday.
The number of initial claims fell 24,000 to 601,000 in the week ended June 6. Economists polled by MarketWatch had expected an initial claims level of 620,000. See Economic Calendar.
The four-week average of these first-time claims, which smoothes out distortions in the week-to-week data, fell 10,500 to 621,750. Despite the declines, initial claims remain at relatively high levels.
In the week ended May 30, continuing claims for benefits reached a new record high, rising 59,000 to 6.82 million from an upwardly revised level in the prior week. Continuing claims have set fresh record highs for 19 consecutive weeks. The four-week average of these continuing claims rose 57,250 to a record 6.75 million.
The level of initial claims is up 55% from the same period in the prior year, and the level of ongoing claims is more than double last year's level. The insured unemployment rate -- the proportion of insured workers who are collecting benefits - remained at 5.1%, the highest rate since December 1982.
While declines in initial claims suggest to some analysts that the peak of job losses has passed, the jobless claims report shows that it continues to be hard to find a replacement job. Further, another 2.2 million are collecting extended federal benefits, which kick in once a person has exhausted eligibility for the state checks, usually after six months.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs. Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.
Last week the government reported that the intense pace of job destruction finally moderated in May as U.S. nonfarm payrolls declined by 345,000 -- the fewest jobs lost in eight months. While the payroll loss was much better than expected and hinted at some improvement in the economy, the U.S. unemployment rate jumped to a 26-year high of 9.4% in May as the number of jobless Americans rose by 787,000 to 14.5 million.
