- by New Deal democrat
Let’s take our regular weekly look at jobless claims. As a brief reminder, I always look at this because, especially in conjunction with stock market performance, it is an excellent short leading indicator, and also leads the monthly unemployment rate.
And the news continues to be very good especially on a historical basis. Initial claims declined -6,000 to 194,000, one of the lowest numbers in 50+ years. The four week moving average declined -1,000 to 197,750, also one of the lowest numbers in 50+ years. With the typical one week delay, continuing claims rose 25,000 to 1.728 million, which remains also well behaved:
On the YoY% basis more important for forecasting purposes, initial claims were down -16.0%, the four week average down -13.2%, and continuing claims down -11.2%:
Note that these comparisons have been getting *even more* positive in the past several months, indicating a strengthening jobs market.
Finally, we’re far enough along in the months to update what this likely portends for the unemployment rate (orange, thin line) for the next few months. Since the unemployment rate is a rounding of the actual ratio of unemployed to the labor force, I’ve also included that (dark red):
We’ve had a slight contratrend move in the last several months in the unemployment rate, likely reflecting the upward tick in new jobless claims earlier in summer. But it is almost certain that the downward trend in the unemployment rate will continue, likely under 4.0% in the next few months.
In short, despite the continued chaotic economic lunacy coming out of Washington, it is extremely hard to derail the US economy. The bigger danger over the next months is that AI will prove to be a bubble after all, the popping of which would drag both consumer spending and also job growth down with it.