After climbing sharply the previous week, seasonally adjusted initial claims for unemployment benefits for the week ending May 18 fell to 340,000, the Department of Labor
reported Thursday. That was a decrease of 23,000 from the previous week's revised figure of 363,000, originally reported as 360,000. For the comparable week of 2012, initial claims were 371,000.
The four-week moving average that flattens volatility was 339,500, down 500 from the previous week's revised average of 340,000. That's in the range of five-year lows.
For all jobless benefit programs, state and federally funded, the total number of claims for the week ending May 4 fell 98,540 to 4,745,266. For the comparable week in 2012, there were 6,168,434 persons claiming benefits. The drop is the result of people finding jobs or exhausting their benefits.
As a result of the budget sequester, jobless workers eligible for federally funddd emergency unemployment compensation will collect benefit checks that are 10 percent or smaller for the rest of the fiscal year. Moreover, several states have also reduced the maximum benefit payment. Some of the same ones and others have reduced the half-century-old standard duration someone can collect benefits from 26 weeks to 20 weeks or less.
Although the connection is by no means linear, a downward trending claims number is historically linked to an upward trend of new jobs created, as reported each month by the Bureau of Labor Statistics. If the connection were linear, the number of new jobs reported June 7 for May would be slightly above the 165,000 announced last month. But anyone making bets on new jobs based on the benefits data could get the same outcome by flipping a coin.
While the "headline" unemployment numbers continue to improve, as they have every month for nearly three years, there are underlying problems—some of them chronic—that don't often make the news. For instance, the Economic Policy Institute reported this week:
Five years after the beginning of the Great Recession the unemployment rate for some minority workers is significantly higher than that for white workers in a number of states, including Texas, New Mexico, Michigan, Mississippi, and North Carolina.
In Michigan, Mississippi and North Carolina, the jobless rate for African Americans is more than double what it is for whites.
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h/t to another American for an important correction about whose compensation checks are being cut and for how long.