The numbers: The number of Americans who applied for unemployment benefits before Memorial Day weekend totaled a low 229,000 after Massachusetts took dramatic steps to weed out a massive increase in fraud.
New jobless claims in the seven days ended May 20 rose by 4,000 from 225,000 in prior week, the Labor Department said Thursday. The figures are seasonally adjusted.
Yet U.S. jobless claims for the first two weeks of May were slashed after Massachusetts amended its prior reports.
The result: Jobless claims show little or no sign of rising U.S. layoffs since the early spring.
“From the week ending Feb. 25 through the week ending May 6, Massachusetts now reports a total of 38,028 [unadjusted] claims, as opposed to the total of 192,037 shown last week before the fraudulent claims were tossed,” noted chief economist Richard Moody of Regions Financial.
Key details: Twenty-six of the 53 U.S. states and territories that report jobless claims showed a decrease. Twenty-seven posted an increase.
In Massachusetts, actual jobless claims fell to 1,640 from a revised 3,830 in the prior week (originally 20,901).
After the state revised its claims reports, new US. unemployment filings in the first two weeks of May were far lower than initially reported.
New U.S. jobless claims were revised down to a 10-week low of 225,000 in the week of May 13 from an original 242,000.
New U.S. filings were also reduced to 231,000 from 264,000 in the week of May 6, a level that would have been the highest since late 2021.
The number of people collecting unemployment benefits in the U.S., meanwhile, fell by 5,000 to 1.79 million.
The gradual increase in these so-called continuing claims over the past year suggests it’s taking longer for people who lose their jobs to find new ones.
Big picture: Unemployment claims tend to climb steadily — to 300,000 and above — when the economy is deteriorating and a recession is approaching.
So far there’s little sign of that. While new jobless claims have risen from less 200,000 in January — a historically low number — they have hardly budged in the past few months.
The muscular labor market might be the chief reason why.
Steady hiring, low unemployment and rising wages are giving Americans the confidence to keep spending. So businesses still have enough demand to avoid major layoffs.
Looking ahead: “After trending higher through the first quarter, initial claims have leveled off and moving more sideways in recent weeks,” said lead U.S. economist Nancy Vanden Houten of Oxford Economics in a note to clients.
“We expect jobless claims will resume their upward trend as the economy weakens and enters a mild recession in the second half of the year, when we look for layoffs to become more widespread,” she added.
Market reaction: The Dow Jones Industrial Average
and S&P 500
were mixed in Thursday trades.