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Consistent with the trend year to date, claims remain in their ~450k range, too high for unemployment to improve meaningfully. This morning the reported number fell 10k to 453k, down from last week's revised print of 463k (revised up 3k), but roughly in line with consensus for 450k. Rolling claims climbed 1k to 459k week over week.  Remember, we need to see initial claims fall to a sustained level of 375-400k in order for unemployment to fall meaningfully and, by extension, lenders' net charge-offs to return to normalized levels.  We remain well above that level.  

As a reminder around the census, May was the expected peak employment month. Starting now, the census will become a headwind for job creation.  

JOBLESS CLAIMS SLIGHTLY BETTER BUT REMAIN IN THE 450K RANGE - rolling claims

JOBLESS CLAIMS SLIGHTLY BETTER BUT REMAIN IN THE 450K RANGE - raw claims

The following chart shows the census hiring timeline.  If the past two cycles are an appropriate model for this year's census, we should start to see Census employment draw down as we move further into June, creating a headwind for employment. 

JOBLESS CLAIMS SLIGHTLY BETTER BUT REMAIN IN THE 450K RANGE - census chart

Joshua Steiner, CFA

Allison Kaptur