Thursday, November 16, 2023

Initial claims rise, but remain below the caution threshold

 - by New Deal democrat

Initial jobless claims rose 13,000 to 231,000 in the past week. The 4 week moving average increased 7,750 to 220,250. With a one week lag, continued claims rose 32,000 to 1.865 million:

I had speculated that the big decline in claims through September may have been affected by some unresolved post-pandemic seasonality, and the last several weeks have indicated that speculation may indeed have had merit. Which makes the YoY comparisons more important.

On the more important YoY basis for forecasting, initial claims were up 9.5%, the four week average up 7.0%, and continued claims up 28.3%:

Initial claims remain below the 10% increase YoY level that would warrant a yellow caution flag. While continuing claims are at YoY levels that in the past signaled recession, they have not increase YoY in almost 6 months, which tells me that longer term unemployment is also not likely to increase YoY.

Finally, here is the update vs. the Sahm rule. So far in November, initial claims are up 7.4% YoY, which suggests an unemployment rate of about 3.8% in the next few months:

This is not at the 4%+ level that would trigger the Rule.