U.S. Claims for Unemployment Insurance Slip, but Remain Historically High

• Initial claims for jobless insurance eased to 4.427 million last week.

• Roughly 26 million individuals filed new claims during the last five weeks.

• The insured jobless rate jumped to 11.0%.

Initial jobless claims for unemployment insurance fell to 4.427 million during the week ended April 18 from 5.237 million in the prior week, revised from 5.245 million. During the last five weeks, 26.453 million people (16.2% of the labor force) filed new claims. The Action Economics Forecast Survey anticipated 4.200 million new filings. The four-week moving average of initial claims of 5.787 million compares to 233,000 early in March,

The latest initial claims figure covered the survey period for April nonfarm payrolls. Claims have increased nearly sixteen times since the March survey week. During the last 20 years, there has been a 70% correlation between the level of initial claims an the m/m change in nonfarm payrolls.  

Continuing claims for unemployment insurance increased to a record 15.976 million (863.0% y/y) in the week ending April 11 from 11.912 million one week earlier, revised from 11.976 million. The four-week moving average of claimants increased to 9.598 million from 6.050  million. The level rose from 1.726 million four weeks earlier. The insured rate of unemployment rose to 11.0% from 8.2%.

The state insured rates of unemployment are lagged by two weeks. The new data cover the week ended April 4. The highest rates were in Michigan (17.4%) and Rhode Island (15.0%), followed by Pennsylvania at 10.6%. The lowest rates were in Florida at 4.0% and South Dakota at 3.5%. These figures increased sharply in the latest week. In other states, New York realized 11.9% unemployment, New Jersey was 10.7%, California stood at 8.3% and Texas was 5.1%. These data are not seasonally adjusted.

Data on weekly unemployment claims going back to 1967 are contained in Haver's WEEKLY database, and they are summarized monthly in USECON. Data for individual states are in REGIONW. The expectations figure is from the Action Economics Forecast Survey, carried in the AS1REPNA database.

In lockstep with other regional Fed indexes recently released, the Federal Reserve Bank of Kansas City reported that its reading of manufacturing business activity plunged to -17 in March following February's improvement to 5. It was the lowest reading since March 2009, indicating major recession in the area's factory sector activity. The index of expectations in six months fell to -19, also the weakest reading in eleven years.

The ISM-Adjusted Index fell to 43.1 (NSA) in March. It was the lowest index level since December 2015 and down from the May 2018 high of 64.2.

The current condition components all weakened this month with new orders, shipments and production each falling sharply. The employment index fell further into negative territory, nearly touching its March 2009 low. The export measure also reached a record low. The employee workweek measure fell deeper into negative territory where it's been for five months.

On the inflation front, prices received for finished products turned negative. The fall to -6 compares to +27 in August 2018. The raw materials prices index hit a four-year low.

The index measuring expectations in six months similarly fell significantly, reflecting sharply lower new orders, shipments and production. The expected employment measure also collapsed.

Expected finished product prices fell sharply along with expected raw materials prices.

The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The survey includes 93 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico and was conducted mid-month. Data for the Kansas City Fed Survey can be found in Haver's SURVEYS database.