The latest weekly labor report finally printed some decent news, as initial claims and continuing claims for unemployment benefits each fell.
Initial claims for unemployment benefits came in at 621,000 in the final week of May, a figure 10k below the 4-week moving average and slightly below the previous week’s 625k.
Despite the reduction, initial claims have been above the 600k threshold for 18 weeks now.
More significantly, Continuing Claims fell 15k in the week ending May 23 to 6.735 million, marking the first fall since January. Don’t expect analysts to call for a plateau, however, as labor losses from automakers are still in the pipeline.
Still, John Herrmann of Herrmann Forecasting said aside from the auto sector, the labor market appears to be turning.
“The steepest cuts in jobs occurred in 4Q-2008 and in 1Q-2009,” he said. “There are remaining cuts in autos and dealers and parts suppliers (obviously), but, elsewhere in the US economy, the pace of job cuts is slowing.”
The report comes one day before the Nonfarm Payrolls report, which is expected to report another half-million job losses for May. Today’s Jobless Claims report comes after the survey period for that report, so it will have no impact on tomorrow’ results.