- by New Deal democrat
We finally have some new data this week - the usual, jobless claims.
Initial claims declined -5,000 for the week, while the four week moving average declined 5,750. With the usual one week delay, continuing claims, on the other hand, rose 10,000 to a new 4.5+ year high of 1.965 million:
I can’t help but note that although the above numbers are seasonally adjusted, it is clear there is some residual unresolved post-pandemic seasonality nonetheless, as ever since the beginning of 2023 we have seen low numbers at the beginning of the year, rising through midyear, and then falling back down through the Holiday season.
On the YoY% change more useful for forecasting, initial claims were up 2.3%, the four week moving average up 1.3%, and continuing claims up 5.9%:
This continues to forecast weakness, but no recession. Interestingly, while there has been no substantial increase in new layoffs, those who are out of work are finding a more difficult time finding new jobs, as is shown by the increase in continuing claims in the last 8 weeks. Also, it is possible the recent lower figure for YoY% increases in new jobless claims might suggest a break in the trend of 5% higher +/-5% we’ve seen since last autumn, but I suspect it is more likely just noise.
Finally, here is an updated look at what this suggests for the unemployment rate going forward:
While most recently the unemployment rate was unchanged from 12 months previous, jobless claims suggest that this comparison should trend higher by about 0.2% or 0.3% in the next few months. A year ago the big increase in the unemployment rate was likely due to the torrent of new immigrants looking for work. Needless to say, this year that is very much not likely to be true any longer.