We’ve heard this story before: new unemployment claims are easing back down after their recent spike. We’ve made no lasting improvement since December. That’s the main story told by this week’s Unemployment Insurance Weekly Claims Report. New claims came in at 460k while last week’s number was revised up 3k. New claims were near the high end of the Bloomberg consensus range of 445k to 462k. From the report:

In the week ending May 22, the advance figure for seasonally adjusted initial claims was 460,000, a decrease of 14,000 from the previous week’s revised figure of 474,000. The 4-week moving average was 456,500, an increase of 2,250 from the previous week’s revised average of 454,250.

The advance seasonally adjusted insured unemployment rate was 3.6 percent for the week ending May 15, unchanged from the prior week’s unrevised rate of 3.6 percent.

The advance number for seasonally adjusted insured unemployment during the week ending May 15 was 4,607,000, a decrease of 49,000 from the preceding week’s revised level of 4,656,000. The 4-week moving average was 4,637,250, a decrease of 11,500 from the preceding week’s revised average of 4,648,750.

Interesting. Just as last week’s bad news came entirely from adjustments, a good portion of this week’s good news comes from seasonal factors. Seasonal adjustments aren’t really supposed to add volatility to the data. Technically, this only applies to the long term. The real world is actually providing a solution to a textbook homework problem. After this adjustment is removed, some good news still remains:

The advance number of actual initial claims under state programs, unadjusted, totaled 404,325 in the week ending May 22, a decrease of 5,765 from the previous week. There were 538,311 initial claims in the comparable week in 2009.

The advance unadjusted insured unemployment rate was 3.4 percent during the week ending May 15, a decrease of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,381,421, a decrease of 88,300 from the preceding week. A year earlier, the rate was 4.6 percent and the volume was 6,153,284.

This news isn’t discouraging, but this cycle we seem to be trapped in is. As a comparison, we’re still at a level associated with the jobless recovery of the dot com bust.

The good / bad lists are consistent with last week’s unadjusted data:

The good list (-1000 or more): CA, MI, WA, FL, OR, NY

The bad list (+1000 or more): IL, MS, MO, TN

TN (the worst) was +3,041 vs CA (the best) at -2,161. Manufacturing is the only member of the big four (service, trade, manufacturing, and construction) that gets lopsided representation. Fortunately, it’s in the good list. Michigan singles out the automobile industry as reason for its good news.

In other news, Democrat lawmakers have cut $50 billion (new cost: $143 billion) from the unemployment extension bill in an effort to gain necessary votes. This bill would bring more states up to the 99 week extension limit and continue COBRA subsidies, but it would not provide the tier V extension many are looking for. Incidentally, only $40 billion of the bill’s costs are associated with unemployment benefits. The main bill is actually delays in Medicare savings and extends a set of expired tax breaks. As a brutal reminder to the 99ers, lawmakers go on vacation next week.

This was actually a pretty good report. Unfortunately, it comes after repeated failures to push below the 400k line associated with sustainable job gains. Every time we get near the line, a surge erases the progress. Let us hope this cycle breaks in favor of employment stability.