- by New Deal democrat
With the stock market flailing around trying to keep its head above water, jobless claims along with consumer spending are the only two metrics that solidly support a continued economic expansion (ok, maybe ISM manufacturing is trending in that way as well).
But to the point of this post: last week initial jobless claims declined -9.000 to 202,000 — again, near historic 50+ year lows. The four week moving average declilned -3,000 to 207,750. Meanwhile, with the typical one week delay, continuing claims rose 25,000 to 1.841 million, still significantly below the 1.900+ we were seeing for most of last year:
[NOTE: For some reason FRED has not gotten around to posting these this morning, so here is the equivalent graph from TradingEconomics.com]:
As per usual, the YoY% changes are more important for forecasting purposes. So measured, initial claims were lower by -9.4%, the four week average down -6.8%, and continuing claims down -1.9% [Since TradingEconomics doesn’t have the YoY comparisons, you’ll have to imagine this until FRED gets around to it].
These are very good comparisons. While most of the data has been very weak, it is just very hard to imagine an economic downturn occurring with for all intents and purposes no layoffs.
Finally, since tomorrow is jobs day, and jobless claims lead the unemployment rate, here is our final look for the month. First, here are the 4 week average of initial claims (blue) vs. the unemployment rate (noisier but more leading):
And here are continuing claims (blue) vs. the unemployment rate (much less noisy albeit less leading):
I expect the unemployment rate to decline, or at very least not increase tomorrow. We’ll see then.
