U.S. weekly jobless claims continue to fall but remain high

U.S. weekly jobless claims were consistent with expectations. For the week ended 6 June, the initial jobless claims came in at 1.5 million, falling 19 percent from last week. This is the largest percentage fall since 11 April.

Meanwhile, for the week ended 30 May, continuing claims dropped 340k to 20.9 million, only the second fall since the crisis started. The fall would have been larger if not for outsized increases in California, Florida and Oregon.

Adding in the nearly 10 million people receiving PUA benefits, there are over 30 million Americans receiving UI insurance. Therefore it is hard to get too optimistic about the May nonfarm surprise, noted Wells Fargo in a research report.

“For the first time we know of, the insured unemployment rate is higher than the U3 unemployment rate. Three reasons: (1) BLS admits they misclassified people, (2) labor force exits and (3) generous UI benefits causing a higher proportion to file claims”, added Wells Fargo.