- by New Deal democrat
This week’s update in jobless claims was decidedly mixed.
Initial claims were unchanged at 248,000. Nevertheless this level was only equaled once and exceeded once in the past year. The four week moving average increased 5,000 to 240,500, the highest number since September 2023. With the typical one week delay, continuing claims increased 54,000 to 1.956 million, the highest level since November 2021:
While the above suggests a ratcheting up of weakness, the YoY% changes are most important for forecasting purposes, and so measured initial claims were only up 2.9%, the four week average up 6.0%, and continuing claims up 7.2%:
For the past 8 months, these comparisons have been in the range of +5% +/-5%, and that pattern has not changed. While the YoY increase suggests weakness, so long as the comparisons remain under +10% there is not even a yellow flag caution for recession. The most noteworthy number is continuing claims, which suggests that while there is no significant increase in the number of people being laid off, those who have been laid off are finding it significantly harder to find new jobs. Again, this suggests weakness but is not recessionary at this point.
Since it is early in the month, instead of taking a look at what this might mean for the unemployment rate, leet’s update the “quick and dirty recession indicator,” which consists of a YoY decline in stock prices, and a YoY increase of 10% or more in the four week average of initial claims:
Neither conditions is fulfilled. There is no suggesting of any imminent recession.
