Job Market Slowly Improving

Initial claims for unemployment insurance fell by 58,000 in the week ending June 13, to 1.508 million. Initial claims for the previous week were revised up slightly, to 1.566 million from 1.542 million. After surging after the coronavirus pandemic struck and hitting an all-time high at close to 7 million in late March, initial claims have fallen for eleven straight weeks, and are down 78 percent their peak. But initial claims are still about 7 times their pre-Viral Recession level, and the rate of decline has been slowing. 

Continuing claims, measuring the number of people actively receiving unemployment insurance, were 20.544 million in the week ending June 6, down 62,000 from the previous week. Continuing claims for the previous week were revised down by more than 300,000, to 20.606 million. Continuing claims have fallen in three of the past four weeks. But the pace of decline has been slow; they are down only 17.5 percent from their peak in early May. 

All of this means that although the job market is improving, layoffs remain extremely high, the pace of layoffs looks to remain extraordinarily high through at least the summer, and the level of unemployment is falling, but only slowly. The May jobs report was much better than expected, with 2.5 million jobs added over the month and the unemployment rate declining to 13.3 percent, from 14.7 percent. But June job gains are likely to be smaller, as will be the drop in the unemployment rate.