On the heels of the blowout May jobs report, market participants will get 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 1.55 million Americans are expected to have filed for unemployment benefits in the week ending June 6, according to economists surveyed by Bloomberg. In the prior week, there were 1.88 million initial jobless claims. Over the past 11 weeks, more than 42 million Americans have filed for unemployment insurance.
Continuing claims, which lags initial jobless claims data by one week, is expected to total 20 million in the week ending May 30 following 21.49 million in the prior week, from 20.84 million in the previous 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 persistent 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.
In the week ending May 30, California reported the highest number of jobless claims at an estimated 230,000 on an unadjusted basis, up from 203,000 in the previous week. Florida had 206,000, up from 175,000. Georgia reported 148,000 and Texas had roughly 107,000 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.
In last week’s report, PUA claims fell significantly to 623,073 from the prior week’s 1.3 million.
“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.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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