Jobless Claims Fall More than Expected, Insured Unemployment Craters

Labor Market Indicators Improve Dramatically Despite Strict Lockdown States

Washington, D.C. (PPD) — The U.S. Labor Department (DOL) reported initial jobless claims fell more than expected by 58,000 to a seasonally-adjusted 787,000 for the week ending October 17. The previous week was revised down significantly by 56,000 to 842,000.

Forecasts ranged from a low of 800,000 to a high of 915,000. The consensus forecast was 865,000. The 4-week moving average was 811,250, a decrease of 21,500 from the previous week, which was also revised down significantly by 33,500 from 866,250 to 832,750.

Lagging Jobless Claims Data

The advance seasonally adjusted insured unemployment rate crated down to 5.7% for the week ending October 10, a decline of 0.7 from the previous week, which was revised down by 0.4 to 6.4. Post-Covid-19 shutdown, the insured unemployment rate first fell to single digits during the week ending August 15 at 9.9%.

The insured unemployment rate hit the first high of the current crisis at 8.2% for the week ending April 4. The all-time high prior to that was 7.0%, recorded in May of 1975. On April 11, it rose to 11.0% and 12.4% on April 25.

Under the Trump Administration, this rate had fallen to an all-time low 1.1% and remained at 1.2% as recently as March 14. But that was before coronavirus (COVID-19) mitigation efforts.

Worth noting, the labor market indicators are improving again despite the most strictest lockdown states — which consequently saw the highest number of infections — disproportionately hurting the labor market and overall economy.

The highest insured unemployment rates in the week ending October 3 were in Hawaii (14.9), California (11.5), Nevada (11.3), Georgia (9.3), Puerto Rico (9.3), Louisiana (8.8), District of Columbia (8.4), New Mexico (7.8), New York (7.7), and Illinois (7.6).

The advance number for seasonally adjusted insured unemployment during the week ending October 10 fell to 8,373,000, a solid decline of 1,024,000 from the previous week’s revised level. The previous week’s level was revised down by 621,000 from 10,018,000 to 9,397,000.

The 4-week moving average was 10,085,750, a decrease of 1,093,500 from the previous week’s revised average. The previous week’s average was revised down by 302,500 from 11,481,750 to 11,179,250.

As is the case with the cratering insured unemployment rate, the significant declines in the number of insured unemployed is occurring despite the disproportionate impact of the most strict lockdown states.

The largest increases in initial claims for the week ending October 10 were in California (+27,870), Illinois (+11,261), Massachusetts (+10,481), Georgia (+9,292), and Indiana (+7,840), while the largest decreases were in Michigan (-2,615), North Carolina (-2,362), Virginia (-1,733), Montana (-579), and Mississippi (-375).