- by New Deal democrat
Initial jobless claims rose another 7,000 to 251,000 last week, an 8 month high. The 4 week average rose 4,500 to 240,500, a 7+ month high. And continuing claims also rose 51,000 to 1,384,000, which is 78,000 above their 50 year low set on May 21:
There is now a clear uptrend in all three numbers. The 4 week average of initial claims is about 40% higher than its low. If the present trend continues till about November, initial claims will be higher YoY, which would signal an imminent recession.
Just speculating here, but an entire very speculative sector of the stock market - internet based delivery services - which boomed during the time of pandemic restrictions, has blown up. I suspect many of the increased layoffs are coming from that sector. Meanwhile more and more businesses are probably learning to make do with being short-staffed as the result of being unable to fill job openings. In any event, the rising trend in layoffs is very much intact. Because initial claims lead the unemployment rate, I fully expect to see an uptick in that rate in the next month or two.