- by New Deal democrat
I’ll get to housing permits and starts later this morning. But first, let me take my regular look at initial and continuing jobless claims. As a reminder, I look at jobless claims because historically they have been a very good short leading indicator for the economy.
And they continue to forecast no imminent recession ahead. For the week, initial claims declined -3,000 to 210,000, still historically in the lowest range going back over 50 years. The four week moving average declined -1,500 to 202,500. Aside from one week each in 2019 and 2014, plus one month in 2022, this is the lowest number since the late 1960s, when the US population was only about half of what it is now. Finally, continuing claims rose 6,000 to 1.782 million, in the lowest range it has been in since 2024:
On the YoY basis more important for forecasting purposes, initial claims were lower by -7.1%, the four week moving average by -11.8%, and continuing claims by -5.7%:
Needless to say, this is a very positive short term indicator for the economy.
And that positive indication extends to the unemployment rate as well, since jobless claims lead that metric by several months:
Initial and continuing claims forecast that the unemployment rate will decline in the next several months to the 4.0% range.
The asterisk with regard to jobless claims is that it likely has been affected by the situation with immigrants, although the exact manner is murky. Most likely even legal hispanic immigrants are reluctant to file claims, where it might attract attention from ICE for a “Kavanaugh stop” or worse. But the fact remains, it is the most positive indicator of all for the economy at present.