MNI DATA PREVIEW: US Jobless Claims To Fall Faster To 2.4M

By Brooke Migdon

     WASHINGTON (MNI) - U.S. weekly jobless claims are expected to fall to 2.4

million Thursday, taking the total number of unemployment insurance applications

since the onset of the Covid-19 pandemic to nearly 40 million.

     The figure in the Bloomberg forecast would lag the previous week's nearly 3

million by roughly half a million, falling more quickly than last week's 195,000

decrease that was the weakest weekly decline since initial claims levels began

slowing in April. 

     Initial claims have declined by an average of 14% per week since peaking in

late March and have likely fallen further on momentum from state reopenings this

month, according to analysts. Still, easing social distancing measures "has and

will continue to be gradual" to stop a second wave of infections, and many

states are still working through significant backlogs that continue to inflate

the level of initial claims, analysts at Bank of America, expecting 2.5 million

filings Thursday, wrote in a research note.

     The Labor Department this month also began factoring claimants filing for

Pandemic Unemployment Assistance and Pandemic Emergency Unemployment

Compensation, programs established as part of the CARES Act signed by President

Donald Trump in March, into its weekly unemployment insurance report, which

could push claims levels slightly higher.

     At the same time, claims filed through May 9 are also expected to be

revised down following a correction issued by the Connecticut Department of

Labor.

     --OPTIMISM IN CONTINUING CLAIMS

     The median forecast for continuing claims, which represents unemployed

workers who have received at least one week of benefits, is expected to climb to

23.5 million Thursday. 

     Continuing claims rose more "modestly" to 22.8 million last week after

increasing to 22.4 million for the week ending April 25, analysts at TD

Securities wrote in a research note, likely due to some laid-off workers being

rehired as states reopen.

     Analysts at Nomura said the relatively small weekly increases in continuing

claims in recent weeks are signs of "further labor market stabilization,"

providing "early evidence of rehiring activity."

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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