- by New Deal democrat
I wasn’t able to get to either the GDP report or the jobless claims report yesterday. I’m going to hold off on the GDP report until next week, because there was a lot going on, but this morning (before the ISM manufacturing Index comes out) let’s take a look at jobless claims.
Yesterday’s report of only 189,000 people making new jobless claims last week really deserves its own special mention. Why?
Well, not only is it the lowest - by 1,000 - of the entire post-pandemic period (note below graphs subtract 189,000 so that the current number shows at 0):
It is also the lowest since September 1969, almost 60 years ago!:
That’s pretty wild.
The four week moving average declined to 207,500, which while very low, is still above several weeks earlier this year and also in January 2024. Continuing claims, with the typical one week delay, declined to 1.785 million:
Here is the YoY% view most important for forecasting purposes:
Initial claims are down a whopping -20.9% YoY, while the four week average is down -8.1%, and continuing claims are down -6.3%.
This is very positive - indeed the most positive datapoint in the entire economy.
As per usual, let’s update what this suggests about what will happen with the unemployment rate in the next several months, which will be reported next Friday for April:
One year ago the unemployment rate was 4.2%. The big downdraft in initial and continuing claims suggests that the unemployment rate, which was 4.3% last month, will decline, possibly all the way to 4.0% in the next few months.
