Over 1.5M Americans filed for unemployment benefits last week, as pace of layoffs slows

On the heels of the blowout May jobs report, market participants got another update on how the U.S. Labor Market is faring amid the ongoing COVID-19 crisis with the weekly jobless claims report Thursday morning.
An additional 1.542 million Americans filed for unemployment benefits in the week ending June 6, below economists’ expectations for 1.55 million jobless claims. Weekly initial jobless claims have decelerated for 10 consecutive weeks. The prior week’s figure was revised higher to 1.897 million from the previously reported 1.88 million. Over the past 3 months, more than 44 million Americans have filed for unemployment insurance.
Continuing claims, which lags initial jobless claims data by one week, totaled 20.93 million in the week ending May 30 following 21.27 million in the prior week. Consensus expectations were for 20 million continuing claims.
“Altogether, incoming data on jobless claims supports our view that the labor market reached a trough around the middle of May and that re-hiring activity has started to accelerate. That said, the persistently elevated readings of initial jobless claims highlight significant ongoing strain and we expect the unemployment rate to remain in double digits into 2021,” Nomura economist Lewis Alexander wrote in a June 5 note.






BROOKLINE, MA - JUNE 1: Melissa Smith, the parent of a 2019 high school graduate, holds a sign at a demonstration led by four Brookline High School juniors, students, teachers, and parents protesting the layoffs of over 300 Brookline Public Schools teachers in Brookline, MA on June 1, 2020. (Photo by Pat Greenhouse/The Boston Globe via Getty Images)

In the week ending June 6, California reported the highest number of jobless claims at an estimated 258,000 on an unadjusted basis, up from 229,000 in the previous week. Georgia had 136,000, down from 149,000. Florida reported 111,000 and New York had roughly 94,000 jobless claims.
Pandemic Unemployment Assistance (PUA) program claims, which include those who were previously ineligible for unemployment insurance such as self-employed and contracted workers, will be closely monitored in Thursday’s report.
PUA claims totaled 705,676 in the week ending June 6, down from the prior week’s 796,813.
“A persistent decline in the PUA claims as we’ve seen in the regular claims data would further increase our conviction in the labor market stabilization and suggest processing backlogs have been cleared. Similarly, stabilization in PUA continuing claims would signal re-employment for gig workers, but this is not our base case in next week's report.”
This week’s initial jobless claims data comes after the Bureau of Labor Statistics reported that the U.S. economy unexpectedly added 2.5 million nonfarm payrolls in May, exceeding economists expectations for 7.5 million job losses. The unemployment rate fell to 13.3% from 14.7% in April.