The highlight by far of the economic calendar right now remains jobless claims which are signaling very healthy conditions in the labor market. Initial claims fell 1,000 in the May 9 week to a 264,000 level that is just below the low estimate in the Econoday consensus. This is the 3rd week in a row that initial claims have been in the low 260,000 range which is a 15-year low and one of the best runs on record. There are no special factors in today's report.
The 4-week average is down 7,750, which is a steep decline for this reading, to a 271,750 level that is more than 10,000 below the month-ago trend and which offers an early indication of strength for the May employment report.
Continuing claims, which are reported with a week's lag, were unchanged in the May 2 week at a 15-year low 2.229 million. The 4-week average, down 12,000 to 2.260 million, is at a new 15-year low. The unemployment rate for insured workers is unchanged at 1.7 percent.
This report follows a soft labor market conditions index and JOLTS report earlier in the week not to mention last week's mostly soft employment report for April. Employers may not be hiring at a brisk rate but, judging by the data in this report, they are definitely holding onto employees.
Initial jobless claims are the standout right now on the economic calendar. The two prior weeks for initial claims came in at the low 260,000 level, a 15-year low which if extended over the next several weeks would become the lowest stretch since the early 1970s. Another 260,000 reading for initial claims, even a 270,000 or maybe 280,000 reading, would send the hawks at the Federal Reserve scrambling.