- by New Deal democrat
Along with the weekly update of retail sals, new jobless claims continue to be the most positive economic data in the entire specturm.
Last week new cliams increased 5,000 to 210,000, which is about average for the entire post-pandemic period. The only other time they were this low was 2018-19, and before that, the 1960s! The four week moving average declined -250 to 210,500. With the typical one week delay, continuing claims declined -32,000 to 1.819 million, the lowest number since June 2024:
On the YoY basis more important for forecasting purposes, initial claims were down -6.2%, the four week average down -5.9%, and continuing claims down 1.8%:
This week let me include the long term historical look at how initial claims lead the *number* of unemployed (red in the graph below), and to a much lesser extent, so do continuing + initial claims:
The same is true with respect to the unemployment rate:
With the significant drop in new and now continuing jobless claims since last November, the forecast is very much that the number of unemployed in the next several jobs reports is likely to decline:
Note that the number of unemployed peaked in September and November. Jobless claims forecast that this number will remain below those peak months.
And the same is true of the unemployment rate, even though it ticked up in the last jobs report:
The unemployment rate is likely to tick down to 4.2% or even 4.1%. The only complicating factor is whether the number of *employed*, as well as the number of unemployed, also declines.
I continue to suspect that, not only is there residual post-pandemic seasonality in the jobless claims numbers, but that the drying up of immigration as well as the ramping up of deportations in the past year has had a great deal to do with both the stalling of employment as well as the relative persistence of the unemployment rate.