Initial claims are the highest since February 7, 2026.
The Big Picture
Reuters: “The big picture remains that the trend in both initial and continuing claims still is very subdued,” said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.
“It would be unwise, however, to conclude that all is fine and well with the labor market simply because claims are low. Low fire, low hire remains an apt description of labor market conditions, and only around one of four of those unemployed make a claim.”
Continued claims tend to follow initial claims with a small lag (valid initial claims become continued claims a week later).
The big picture analysis is flawed, almost universally. That’s because unemployment insurance runs out after 26 weeks maximum (some states much less).
To get an accurate assessment of continued claims, one must factor in those who have exhausted all benefits.
Continued Claims and 27+ Weeks Unemployed Detail
Economic Stress Monthly Average
- Continued Claims: 1.788 million (April)
- 27+ Weeks Unemployed: 1.833 million (April)
- Total: 3.621 million (April)
The numbers are much worse than they look.
Q: Why?
A: Most states offer 26 weeks of unemployment.
Five Factors Making Things Worse
- Twelve states have a maximum of 21 weeks of benefits. Seven states including Florida offer 16 weeks of benefits or less.
- Once someone maxes out benefits, they drop off continued claims counts.
- The self-employed have no benefits and cannot file an unemployment claim. Tariffs hit small businesses and the self-employed disproportionately.
- Immigrants are hesitant to file a claim, even those who have been working here for years.
- Illegal immigrants are highly unlikely to respond to BLS phone calls regarding unemployment. This means the unemployment level itself is undercounted.
At a minimum, continued claims undercount stress by a minimum of 2 million. That is the number of of 27+ week unemployed, plus everyone in points #1 through #4 above.
I have yet to see any mainstream media report cover this important detail about people with expiring benefits.
Continued Claims vs Unemployment
Key Continued Claims Points
- Of the 7.373 million unemployed, only 1.788 million are receiving unemployment benefits. That’s only 24.2 percent.
- Of the 7.373 million unemployed, 2.890 million have been unemployed 15 weeks or longer. That’s 39.2 percent.
What About Assumptions?
The above chart assumes BLS monthly unemployment measures are accurate.
Do you want to bank on that?
In annual revisions, the BLS monthly reports job reports hugely lower for 2024 and 2025. I expect more negative revisions based on highly accurate Quarterly Census of Employment and Wages (QCEW) and Business Employment Dynamics (BED).
QCEW and BED are 92+ percent of the data but lagging many months. In QCEW and BED we see jobs falling.
Business Employment Dynamics
More jobs are lost in closing businesses than gained in new businesses.
BED Net Job Creation
The Business Employment Dynamics (BED) data shows a net loss of 159,000 jobs for 2025 Q3 and a net loss of 321,000 jobs for 2025 Q2.
Firm Size
- Firms with 1 to 49 employees had a net employment decrease of 138,000.
- Firms with 50 to 249 employees experienced a net employment loss of 75,000.
- Firms with 250 or more employees added 4,000 net jobs.
Trump’s tariffs are destroying small businesses.
This looks incredibly stagflationary, but for now, AI is keeping the economy in expansion.
So, no, I don’t believe the current unemployment numbers for 2026, and I expect them to be revised lower yet again.
What’s Happening Synopsis
Initial claims have been reasonably steady. But once out of a job, it is increasingly difficult for a person to find one.
History suggests that once someone hit 15 weeks unemployment, they are stuck and will eventually get to 27 weeks and fall off claims.
Anyone claiming a reasonable or strong jobs market based off continued claims does not understand what’s going on.
Meanwhile, the cost of nearly everything is rising.
For discussion, please see How the War in Iran Is Contributing to Soaring Food Prices
Fertilizer, diesel, and natural gas all have an impact on food. The impact first shows up in producer prices, then consumer prices.
Related Posts
June 2, 2026: Trump’s Economic Director Claims Real Incomes Are Going Up
Let’s do a fact check on the administration’s claim.
May 26, 2026: Consumer Credit Stress Is Comparable to the Great Recession
Auto delinquencies are at a new record and credit cards are near record high.
May 28, 2026: Inflation Expectations Surge in Two Distinct Consumer Confidence Surveys
57% of consumers say high prices are eroding their personal finances.
On February 27, 2026, I noted BLS Private Payrolls for 2025 Q2 Overstated by ~847,000
The Business Employment Dynamics report shows -321,000 vs Payroll report +526,000. Believe BED.
On May 4, 2026, I noted Net Job Creation by New Businesses Is Negative Once Again
More jobs are lost in closing businesses than gained in new businesses.
- From June 2025 to September 2025, gross job losses from contracting and closing private-sector establishments were 7.6 million, a decrease of 272,000 jobs from the previous quarter.
- Over this period, gross job gains from expanding and opening private-sector establishments were 7.5 million, a decrease of 110,000 jobs from the previous quarter.
Every economic metric are the same as during previous recessions, except two consecutive quarters of economic contraction. Maybe the criteria of two consecutive quarters of economic contraction should be replaced with 2 consecutive quarters of net job losses. Certainly the economy has to be contracting if people people are losing their jobs due to less economic activity.
The definition of recession is definitely NOT two consecutive quarters of declining GDP.
Happened many times with no recession.
An one recession with only two months.
With all the AI-related job losses being reported I’m surprised these numbers aren’t higher.
Remote work — not AI — has sidelined recent college graduates, research finds
https://www.npr.org/2026/06/01/nx-s1-5843076/remote-work-college-graduates-unemployment-ai
I’ll say it a million times: AI job losses are just a cover story for companies shedding workers they overhired during the pandemic free money event. It is not capable of working in its own in an economical way, and the only way it can right now is using the billions and billions of dollars in free tokens companies are being given to hook them into paying more for an LLM than a real employee. It is a mirage of historical proportions.
No company over hires and for four years. No, it’s AI washing a down turn. Which company, assuming that AI improves productivity wouldn’t welcome the extra virtual hands on deck to produce even more? Which company would get rid of excess productivity in favor of the old one? A company whose business is going down, not up.
Don’t worry. According to this study (https://www.library.hbs.edu/working-knowledge/enhance-or-eliminate-how-ai-will-likely-change-these-jobs), coroners and undertakers should still enjoy job security.
Taco doesn’t care. In fact, in his mind, the more the merrier.
Four month high, wow, that’s absolutely nothing, if you consider it accurate which of course BS. Waite a while, it’ll be a over 10% soon enough.
If I am not mistaken, I put together a comprehensive report, with excellent charts and points not covered elsewhere, and you are nitpicking over a point that I actually made about the accuracy of the current data.
I’m not nitpicking at all Mish, this comment was zero to do with your article. I’m just saying a four month high will be dwarfed by a multi decade high when this ponzi scheme economy implodes soon. I actually value your work.
Why’d you word it like a jerk then?
Ya the jerk, jumping on the bandwagon you ass kisser. My wording was correct, the assumptions were incorrect. Go add ya own comment instead of jumping on everyone else’s child.
Trump and his crooked cronies need to be permanently unemployed.