Initial claims are the highest since February 7, 2026.The Big PictureReuters: “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 DetailEconomic Stress Monthly AverageContinued 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 WorseTwelve 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 UnemploymentKey Continued Claims PointsOf 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 CreationThe 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 SizeFirms 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 SynopsisInitial 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.Original Post