Jobless Claims a Kill-Joy for Housing Progress
First time claims for state unemployment benefits dropped 12,000 to a seasonally-adjusted 631,000 in the week ending May 2, according to the Labor Department, dampening signs of improvement seen in some housing markets. “In many markets we’ve seen signs you’d expect to see not long before prices would normally stabilize: robust investor and first-time-buyer activity, 10-plus months of year-over-year sales gains, and less price erosion, if any,” says John Walsh, MDA DataQuick president, speaking of the California housing market. “The problem,” he continues, “is that we still face...layoffs," as does the rest of the US. The largest increases in initial claims this week were seen in Michigan -- where a whopping 16,817 people filed a claim, according to the department's most recent data -- followed by North Carolina, Virginia, Kentucky and Pennsylvania. The nation-wide insured unemployment rate for the week -- the proportion of covered workers who are receiving benefits -- continued to rise, from 4.9% to 5.0%, marking the highest level since at least December 1982. And the total number of people who remained on the benefits roll in the reported week after collecting at least one week of aid hit a new record high, climbing 75,000 to a seasonally-adjusted 6.66m, according to Labor Department data. Nonetheless, the four week moving average of initial claims across the US, which can smooth volatility in employment trends, actually dropped by 3,500 to 628,500 claims. In a separate report this week, Wells Fargo (WFC) said one in every four homeowners do not have any money in savings to cover living expenses should they lose their income, fueling yet more anxiety over job loss. Write to Kelly Curran.