Jobless claims drop but we still have over 400,000 new jobless every week

In what is a big relief for the jobs outlook, initial claims fell back sharply as hoped following a giant special-factor spike in the prior week.

However, our optimism is muted because the figure is still above 400K.  Despite the decline, the current level is significantly above March with the four-week average continuing to rise, up 4,000 to 436,750 for a very significant 40,000 increase from the month-ago comparison. Claims thankfully came down in the latest week but further declines will be needed in the weeks ahead before confidence in job growth can build. Via DOL:
In the week ending May 7, the advance figure for seasonally adjusted initial claims was 434,000, a decrease of 44,000 from the previous week's revised figure of 478,000. The 4-week moving average was 436,750, an increase of 4,500 from the previous week's revised average of 432,250.

The advance seasonally adjusted insured unemployment rate was 3.0 percent for the week ending April 30, unchanged from the prior week's unrevised rate of 3.0 percent.

The advance number for seasonally adjusted insured unemployment during the week ending April 30 was 3,756,000, an increase of 5,000 from the preceding week's revised level of 3,751,000. The 4-week moving average was 3,718,500, an increase of 13,250 from the preceding week's revised average of 3,705,250.

For an idea of why we are skeptical about this piece of fake good news, see the jobless claims graph below. See how jobless claims have spiked in the last month.  That should temper those who say that we are creating jobs. The real answer is we were creating jobs, but not anymore.

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  1. An idea of why we are skeptical about this piece of fake good news.

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