Weekly Jobless Claims Show Major Drop in the Army of the Unemployed

Keep in mind that the latest unemployment rate came in at 7.5% for April. And the four-week average fell by only 500 to 339,500.

Where investors will see a handy difference is in the continuing jobless claims, reported with a one-week lag. This figure fell by a sharp 112,000 to 2,912,000, and this matters because this is what we continually refer to as the army of the unemployed. If that can keep shrinking, the unemployment rate will keep falling. The question is how many of these long-term unemployed are getting jobs and how many are rolling into other programs.

We would point out that this week we featured the states with the highest number of workers on disability, which is a new status many out-of-work people are using to maintain benefit payments for long after the unemployment benefits expire.

S&P futures are still down 15 points at 1,640, and DJIA futures are still down 114 points at 15,206.