Economic Report: U.S. jobless claims fall back to 229,000 after fraudulent filings are erased

The numbers: The number of Americans who applied for unemployment benefits before Memorial Day weekend totaled just 229,000 after Massachusetts took dramatic steps to weed out a massive increase in fraud.

New jobless claims in the seven days ended May 20 rose by 4,000 from 225,000 in prior week, the Labor Department said Thursday. The figures are seasonally adjusted.

Yet U.S. jobless claims for the first two weeks of May were slashed after Massachusetts amended its prior reports.

The result: Jobless claims show little or no sign of rising layoffs.

New jobless claims have risen from less 200,000 in January — a historically low number — but they have hardly budged in the past few months. That’s a sign the labor market is still quite sturdy.

Key details: Twenty-six of the 53 U.S. states and territories that report jobless claims showed a decrease in the week ended May 15. Twenty-seven posted an increase.

In Massachusetts, actual jobless claims fell to 1,640 from a revised 3,830 in the prior week (originally 20,901).

After the state revised its claims reports, new US. unemployment filings in the first two weeks of May were far lower than initially reported.

New U.S. jobless claims were revised down to a 10-week low of 225,000 in the week of May 13 from an original 242,000.

New U.S. filings were also reduced to 231,000 from 264,000 in the week of May 6, a level that would have been the highest since late 2021.

Big picture: Unemployment claims tend to climb steadily — to 300,00 and above — when the economy is deteriorating and a recession is approaching. So far there’s little sign of that.

The muscular labor market might be the chief reason why.

Steady hiring, low unemployment and rising wages are giving Americans the confidence to keep spending. So businesses still have enough demand to avoid major layoffs.

Market reaction: The Dow Jones Industrial Average
DJIA,
-0.11%

and S&P 500
SPX,
+0.55%

were set to open mixed in Thursday trades.

This post was originally published on MarketWatch

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