Jobs are increasing but jobless claims still too high

Despite strong job growth last month, weekly jobless claims continue to be a problem, holding well above 400,000 each week and having shown little improvement since late 2009.

The Labor Department reported this morning that weekly initial jobless claims fell 4,000 to 444,000.


With all of the signs that the economic recovery is picking up steam, including an impressive increase of 290,000 jobs in April, one would suspect that weekly claims would be in a steady downward trend, probably below 400,000.

That has not been the case. Yes, claims are well off early 2009’s high, but progress has stalled.

Claims and job creation

There is not a one-to-one correlation between jobless claims and nonfarm payrolls, but the high level of claims suggests that we won’t be seeing the high level of unemployment fall in the near term.

Robust and consistent gains in payrolls and a falling unemployment rate will only be achieved when claims are consistently and solidly below 400,000 and trending lower.