The labor market may have given another sign of improvement in the U.S. economy. Initial claims for unemployment insurance fell a surprisingly sharp 52,000 last week to 565,000 after a slightly revised 13,000 decline during the prior week. The latest level was off from the March peak of 674,000 and it was the lowest level since mid-January. The four-week average of claims, which smoothes out some of the volatility in the weekly numbers, also fell to 606,000. The latest weekly level was quite a bit lower than Consensus expectations for 610,000.

The Labor Department indicated that the largest increases in initial claims for the week ending June 27 were in New Jersey (+7,876), Massachusetts (+4,730), Kansas (+4,469), Kentucky (+3,614), and New York (+3,019), while the largest decreases were in Florida (-12,493), Illinois (-5,321), Pennsylvania (-3,949), California (-2,919), and Tennessee (-2,743).

Continuing claims for unemployment insurance jumped 159,000 to a new record high, though these figures do lag the initial claims by one week. Continuing claims provide an indication of workers' ability to find employment. At 6,883,000 claims were more than double the year ago level. The four-week average of continuing claims also touched a new record high. The series dates back to 1966.

The insured rate of unemployment inched up just slightly to 5.1%, essentially where it has been for the last eight weeks. It was, however, the highest rate since 1983. During the last ten years there has been a 93% correlation between the level of the insured unemployment rate and the overall rate of unemployment published by the Bureau of Labor Statistics.

The highest insured unemployment rates in the week ending June 20 were in Michigan (6.8 percent), Puerto Rico (6.8), Oregon (6.7), Pennsylvania (6.4), Nevada (6.2), Wisconsin (5.7), California (5.3), Illinois (5.3), North Carolina (5.3), and South Carolina (5.3).

The unemployment insurance claims data is available in Haver's WEEKLY database and the state data is in the REGIONW database.

Federal Reserve's Initiatives to Support Minority-Owned Institutions is the title of today's speech by Fed Governor Elizabeth A. Duke and it can be found here.