New seasonally adjusted (SA), filings for unemployment insurance benefits fell 19,000 to 238,000 for the week ending April 29th, while the four week moving average (4WMA), was 243,000, up 0.3% week on week. The current SA new claims number is now 64% below the 665,000 peak realized the week of March 28th 2009.
Figure 1 presents a chart if initial claims from 2013 to present for both SA and non-seasonally adjusted values. Jobless claims fall during the peak holiday shopping period and rise after the season is over. The current level of new claims is the lowest it has been since the 1970s.
New filings for benefits have remained below 300,000 for 113 weeks as the U3 unemployment rate stands at 4.5% and the U6, (total unemployed, plus all marginally attached workers plus total employed part time for economic reasons), unemployment rate measures 8.9%. The U3 is at its lowest level since April 2007, while the U6 is at the lowest level since December 2007.
Continuing SA unemployment claims fell 50,000 to 1,978,000 for the week ending April 15th, as the 4WMA came in at 2,023,250, down 94,202 week on week, and down 167,116 year on year. The current SA continuous claims number is now 70% below the 6,618,000 peak realized the week of June 27th 2009, (Figure 2).
The labor market is performing well despite being in its eighth year of expansion. It is becoming increasing difficult to find workers with the right skills and that is putting the brakes on hiring. Job openings remain elevated and have consistently exceeded hiring and layoffs remain exceedingly low. Economists expect to see rising wage pressures as the supply of qualified workers diminishes.
At Gerdau, we keep a keen eye on the employment numbers because we have demonstrated that there is an excellent correlation between employment levels and steel consumption. High job creation and low unemployment translate to strong steel demand and vice versa.