EconUpdate by P. Duffy
Initial claims dip 4.9 percent to 385,000, but continued claims in previous week rebound 4.7 percent to 3.8 million
What does this mean? Although there are ebbs and flows between weeks, the overall trend is showing gradually lower claims.
In the week ending May 29, initial unemployment claims were 385,000, a decrease of 20,000, or 4.9 percent, from the previous week’s revised level, to the lowest level since mid-March 2020. Continued claims during the week ending May 22 were 3,771,000, an increase of 169,000, or 4.7 percent, from the previous week’s revised level. The total number of continued weeks claimed for benefits in all programs for the week ending May 15 was 15,435,982, a decrease of 366,178, or 2.3 percent, from the previous week.
May service sector index rises to another record high of 64
What does this mean? Despite constraints in capacity and sourcing labor, the service sector is expanding at a record level.
The Services PMI® reached another all-time high in May, registering 64 percent, which is 1.3 percentage points higher than April’s reading of 62.7 percent. The May reading indicates the 12th straight month of growth for the services sector, which has expanded for all but two of the last 136 months. However, some capacity constraints, material shortages, weather-related delays, and challenges in logistics and employment resources continue.
Labor productivity up 5.4 percent in 1Q21 and 4.1 percent year-on-year, wage inflation rises
What does this mean? Although productivity has surged, so have wages, up 7.2 percent in 1Q21 and 8.3 percent year-on-year.
Nonfarm business sector labor productivity increased 5.4 percent in the first quarter of 2021, as output increased 8.6 percent, hours worked increased 3.0 percent and hourly compensation rose 7.2 percent. From the first quarter of 2020 to the first quarter of 2021, productivity increased 4.1 percent, reflecting a 1.1-percent increase in output, a 2.9-percent decline in hours worked and a rise of 8.3 percent in hourly compensation.