Updated: 04-Jun-09 09:00 ET

Initial Claims for the Week Ended May 30

Updated: 04-Jun-09 09:00 ET

Highlights

• Initial claims for the week ended May 30 were 621K, which was pretty much in-line with the consensus estimate of 620K.  The prior week was revised to 625K from 623K, which brought the 4-week moving average up to 631K from 627K, as the 605K reading for the week ended May 2 dropped out of the equation.
• Continuing claims actually dropped for the week ended May 23 to 6.735 mln from 6.75 mln.  That was the first drop in 20 weeks; however, the 4-week moving average still jumped to 6.688 mln from 6.599 mln.

Key Factors

• The initial claims number is consistent with recent reports, which have clearly signaled that the pace of layoffs is slowing.
• The drop in continuing claims number will undoubtedly bring out the green shoots metaphor in press reports.  It is obviously a step in the right direction, but it's nothing to get overly excited about given the Fed Chairman's recent acknowledgment that job losses are expected to remain significant in coming months and considering one week does not a trend make.

Big Picture

• New claims for unemployment are at recessionary levels, as the financial crisis on Wall Street spilled over to Main Street in noticeable fashion with the seizing up of the credit markets in late summer/early fall 2008.