The U.S. Department of Labor has reported that jobless claims in the week of May 23, 2020, fell by 323,000 to 2.123 million. The prior week’s reading was revised upwards by 8,000 claims to 2.446 million.

Dow Jones (Wall Street Journal) had been expecting an even larger drop, as it published a consensus estimate of 2.05 million.

The Labor Department also gave a four-week moving average of 2.608 million, a drop of 436,000 from the prior week. This number will be smoothing out now that claims are getting closer to the 2 million reading and after those massive numbers at the start of the furloughs and layoffs have come off the comparable reports.

Another positive piece in this report is that the advance seasonally adjusted insured unemployment rate was 14.5% for the week ending May 16. This was down 2.6 percentage points from the prior week’s revised reading, and that rate also had been revised down to 17.1% from a prior 17.2%.

Where the big gain was seen was in the continuing claims, or the so-called army of unemployed people. This report also comes with a one-week lag, but the continuing claims for the week of May 16 fell by a sharp 3.86 million to 21,052,000. Even better, the prior week’s report on continuing claims was revised down by 161,000 to 24.912 million from a peak of 25.073 million.

Make no mistake in thinking that these are anywhere close to good numbers. Sadly, all the markets and the economy can hope for now is that the economic readings continue to look less ghastly each week and each month.

As certain Federal Reserve presidents have said, the real unemployment rate is likely to have peaked above 20%. And that is at a time that U.S. gross domestic product in the second quarter is likely to be worse than −20%.

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