A strong May employment report is in the cards based on unemployment claims. Initial claims in the May 12 week, which is also the sample week of the monthly employment report, came in at 222,000 which is higher than expected and up 11,000 from the prior week but a comparison with the sample week of the April employment report shows an 11,000 drop. And the 4-week average, falling 2,750 to 213,250, is down a very sizable 18,250 against April's sample week. The current 4-week average is the lowest since 1969.
Continuing claims, where data lag by a week, fell a sizable 87,000 to 1.707 million in data for the May 5 week with this 4-week average down 40,000 to 1.774 million. Both readings are the lowest since 1973. The unemployment rate for insured workers is down 1 tenth to 1.2 percent.
Employers are holding onto their employees as never before in what is very convincing evidence that the labor market is at, or very near, full employment.
Initial claims are expected to come in at 215,000 in the May 12 week which is also the sample week for the monthly employment report. This would be a 4,000 increase from 211,000 in the prior week but would still compare very favorably with 231,500 in the sample week for the April employment report. Low readings in this report are consistent with strong demand for labor.