Jobless claims: It's still tough out there
Decline in number of people filing for first-time benefits fails to match prior week's surge, and continuing claims set record for 16th straight week.
NEW YORK (CNNMoney.com) -- In two indications of continuing job market weakness, a drop in the government's weekly reading of initial unemployment claim filings failed to match the surge of the prior week, and the number of people filing on an ongoing basis rose to a record high for the 16th straight week.
A total of 631,000 people filed new claims for jobless benefits in the week ended May 16, the Labor Department said. That's a decrease of 12,000 from an upwardly revised 643,000 in the previous week.
The total was less than expected. Economists surveyed by Briefing.com had forecast 625,000 initial claims, according to a consensus estimate.
The 4-week moving average, which smoothes out volatility in the labor market reading, was 628,500, a decline of 3,500 from the previous week's revised average of 632,000.
Initial jobless claims surged by 38,000 the previous week in the wake of the Chrysler bankruptcy and General Motors (GM, Fortune 500) restructuring proposal. Last week's easing did not make up for that gain.
"The uncomfortable suggestion must be that the underlying pace of claims is not slowing as much as appeared to be the case a few weeks ago, though the volatility of the numbers means we need to see more data to be sure," said Ian Shepherdson, Chief U.S. Economist at High Frequency Economics, in a research note.
While the pace of initial claim filings does not signal an imminent recovery, Shepherdson also does not see the measure getting significantly weaker.
"We'd be very surprised if the underlying trend in claims were to start rising again, but these latest numbers do not encourage the idea that the pace of layoffs is dropping sharply," he said.
Unable to get back in the market: Continuing claims have remained at a record high, even as initial jobless claims dipped on a weekly basis, because unemployed workers are having a hard time finding a new job once they lose their job.
In the week ended May 9, the most recent data available, 6.66 million continuing claims were filed. That's the highest number since the Labor Department started tracking the data in 1967 and an increase of 75,000 from the revised level for the previous week.
The 4-week moving average for continuing claims was 6.48 million, an increase of 131,000 from the previous week's revised average of 6.35 million.
The Labor Department's monthly jobs report for April, released May 8, showed the unemployment rate at 8.9%, a 25-year high.
The report showed that 27% of 13.7 million unemployed Americans have been out of work for more than six months. That marks the highest percentage of long-term unemployed compared to the overall pool of in the 61 years that reading has been tracked.