- by New Deal democrat
The superlow number of job losses in the country continues to be one of the two most powerfully positive signals for the entire economy.
Last week only 199,000 people filed for new jobless benefits, the third week in a row that the number was fewer than 200,000. The four week moving average declined -4,500 to 198,750, the first time that number has been below 200,000 since briefly in 2022. With the typical one week delay, continuing claims rose 24,000 to 1.801 million:
Aside from those several weeks in 2022, the only other time in the entire 60 year history of this data series that this number has been under 200,000 was during 1968 and 1969, when the US population was only about 1/2 of what it is today:
These are just extremely powerful positive numbers.
As per usual, for forecasting purposes, the YoY% changes are more important; and here, initial claims were down -11.9%, the four week moving average down -10.1%, and continuing claims down -8.3%:
This is about the very best comparison in the entire post-pandemic period.
Unsurprisingly, when we put this together with stock prices for the “quick and dirty” forecasting method, we also see that this is about the most positive the two have been in tandem:
Finally, with the July jobs report due tomorrow, here is our final look at what initial and continuing claims suggest about the direction of the unemployment rate over the next several months:
Earlier this week I read that Goldman is forecasting a 0.1% increase in the unemployment rate in tomorrow’s report. I suppose that is possible, given the upward blip in new claims in June. But the last time new and continuing unemployment claims were at this level in 2023 and early 2024, the unemployment rate was 3.7%-3.9%. And that is the direction the unemployment rate is likely to take in the next few months.