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Data released on Thursday, showed initial jobless claims dropped for the tenth week in a row, reaching 1.5 million on the week ended June 6. Analysts at Wells Fargo, explained that for the first time insured unemployment rate is higher than the U3 unemployment rate (people without a job in the labor force). They see that happened because the BLS admits they misclassified people, labor force exits and generous claims benefits causing a higher proportion to file claims. 

Key Quotes: 

“Overreliance on jobless claims led every forecaster to miss the increase in May nonfarm employment, but claims are still a useful indicator. Initial claims fell 19% from last week to 1.5M, the largest percentage decrease since April 11.”

“Continuing claims fell by 340K to 20.9M, only the second decrease since the crisis began.”

“Adding in the nearly 10M people receiving PUA benefits, there are more than 30M Americans receiving UI insurance. It’s therefore hard to get too optimistic about the May nonfarm surprise.”

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