Initial jobless claims fell last week

Minneapolis (CNN) The number of first-time claims for weekly jobless benefits fell to 242,000 last week, down 22,000 from 264,000 the week before, according to data released Thursday by the Labor Department.

Continuum claims filed by people who received unemployment benefits for more than a week fell to 1.799 million in the week ended May 6, from 1.807 million in the previous week.

According to consensus estimates on Refinitiv, economists forecast the latest initial and continuing claims to be a seasonally adjusted 254,000 and 1.818 million, respectively.

However, reports of fraud incidents in Massachusetts have muddied this key economic data in recent weeks.

A week ago, the Labor Department’s report on unemployment insurance filings showed that the number of weekly initial claims rose to 22,000, the highest level since October 2021. However, a large share of those new claims came from Massachusetts. The Labor Department said the reported gains were a reflection of an increase in fraudulent activity and not necessarily an increase in people filing for unemployment benefits.

“The Massachusetts Department of Unemployment Assistance is experiencing an uptick in fraudulent attempts to access unemployment insurance benefits,” Matthew Kitsos, a spokesman for the state’s Office of Labor and Workforce Development, said in a statement. “Fraud attempts are on the rise across the country, and Massachusetts is no exception. The increase in initial weekly jobless claims does not reflect individuals filing for unemployment insurance, but computer fraud attempts.”

Thursday’s report appears to balance that and a recent increase in Massachusetts. Weekly claims for Massachusetts fell by 14,042 on a non-seasonally adjusted basis, representing a three-quarter increase of 18,605 claims.

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“Except for Massachusetts, initial claims have been confirmed after much movement in recent weeks. [the first quarter]A reminder that labor market conditions are still relatively tight,” Oxford Economics’ leading U.S. economist Nancy Vanden Houten wrote Thursday. “While we expect [Federal Reserve] A resumption of rate hikes cannot be ruled out unless labor market conditions ease significantly further to keep rates steady at its June meeting.”

A series of statements that show stickiness

In a note released earlier this week titled “Something Fishy in Massachusetts,” Bank of America economists said initial jobless claims rose to 6,420 on a non-seasonally adjusted basis in the week ended May 6, representing 45% of the total increase. 13,969 requests. The apparent influence of Massachusetts’ claims is an anomaly, BofA economists wrote, given that the state’s total employment rate is less than 3% of U.S. employment, and its initial jobless claims are typically less than 3% of all weekly U.S. claims.

With the exception of the one filed in Massachusetts and the recount, initial claims have moved “laterally,” pointing to limited layoffs, economists Stephen Juno and Michael Capen wrote.

The persistent claims, however, appeared to be less eroded by Massachusetts’ action, the economists wrote. They wrote that they continue to act as a response to “sticky” unemployment.

“After re-examining the latest claims data, we are taking less of a signal from the initial claims data,” Juno and Capen wrote in a Tuesday note. “Although there are signs that unemployed workers are having a difficult time finding a new job due to low hiring rates, layoffs remain low and the labor market remains firm.”

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Weekly jobless claims — which are highly volatile — are below the historical average: In the decade before the pandemic, weekly claims averaged 311,000.

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