Thursday, April 27, 2023

Four week average of initial claims drops below “yellow flag” level, for now


 - by New Deal democrat

While GDP will get the lion’s share of attention today (and I’ll post on it later on), by and large it is a look in the rear view mirror. The more forward-looking data is weekly jobless claims.

This week initial claims declined -16,000 last week to 230,000. The more important 4 week average declined -4,000 to 236,000. Continuing claims, with a one week lag, declined -3,000 to 1.858 million:

More importantly for forecasting purposes, YoY initial claims were up 11.1%, the 4 week average up 9.8%, and continuing claims up 22.1%:

That the 4 week average declined below 10% removes the “yellow flag” recession caution for the moment, although the increase in continuing claims is consistent with a recession in the immediate future.