- by New Deal democrat
This morning there is a slew of economic data, including personal indome and spending, jobless claims, durable and capital goods orders, revisions to GDP, and new home sales. Since tomorrow there is very little data, I am going to report on the first two tdoay, and save the rest for tomorrow.
Let me start with my usual weekly report on jobless claims. As per usual, I do this because historically they have been a very good short leading indicator.
Last week initial claims rose 5,000 to 215,000, and the four week moving average rose 6,250 to 209,000. Both of these continue to be excellent numbers from the historical perspective. Continuing claims rose 15,000 to 1.786 million:
As usual, the YoY% changes are more important for forecasting purposes, and all of these were negative comparisons (which means very positive for the economy). Initial claims were down -8.9%, the four week average down -8.6%, and continuing claims down -6.8%:
Based on long term historical data, these portend continuing economic growth in the next few months. There is an important caveat, which is that the historically low jobless claims numbers are consistent with historically low working age population growth, fueled in large part by a virtual halt to immigration. In particular, it is probably not a coincidence that the YoY negative comparisons began last July and have intensified since. While Los Illegales cannot make unemployment claims, legal immigrants can but may be afraid of ICE targeting them anyway (because ICE has certainly been detaining and even deporting legal immigrants). Additionally, if an employer’s undocumented workforce has dried up, then it will take a lot more slack in the jobs queue before the employer begins to lay off remaining workers.
Finally, since jobless claims lead the unemployment rate, let’s do our update of that comparison:
The big slide in the monthly averages of both initial and continuing jobless claims forecast a similar decline in the unemployment rate in the next few months, not just to 4.0%, but possibly even lower.
The bottom line is that the employment sector of the economy (if not necessarily the income earned) is doing quite well.
