U.S. Jobless Claims Pull Back Further Off Record High But Remain Elevated

First-time claims for U.S. unemployment benefits pulled back further off the record high set in late March in the week ended May 16th, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims dropped to 2.438 million, a decrease of 249,000 from the previous week’s revised level of 2.687 million.

Economists had expected jobless claims to tumble to 2.400 million from the 2.981 million originally reported for the previous week.

Jobless claims fell for the seventh straight week after reaching a record high of 6.867 million in the week ended March 28th.

The total number of new claims since the coronavirus-induced lockdowns began in mid-March still reached 38.6 million.

The less volatile four-week moving average also slumped to 3.042 million, a decrease of 501,000 from the previous week’s revised average of 3.543 million.

On the other hand, the report said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, spiked by 2.525 million to 25.073 million in the week ended May 9th.

The four-week moving average of continuing claims also surged up to 22,002,250, an increase of 2,313,500 from the previous week’s revised average of 19,688,750.

Paul Ashworth, Chief U.S. economist at Capital Economics, said the sharp increase in continuing claims “illustrates that the easing of lockdowns in many states has not yet resulted in any large-scale recall to work for those currently on temporary layoff.”

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