- by New Deal democrat
Initial and continuing claims once again continued their recent good streak.
Initial claims declined -2,000 to 210,000, while the four week moving average rose 2,500 to 211,250. Continuing claims, with the typical one week delay, increased 4,000 to 1.807 million:
While these aren’t the 50+ year lows we saw 18 months ago, they’re not far off.
For forecasting purposes, the YoY% change for initial claims is -15.0%, while the four week average is down -10.4%. Continuing claims are now only up 0.2%:
Needless to say, these strongly indicate no recession in the next few months.
Because jobless claims can be used to forecast the “Sahm rule” for recessions, let’s update that as well.
With last month’s 2 year high in the unemployment rate, last week I write that U wondered whether, because unemployment includes both new and existing job losses, it followed continuing claims more than initial claims (although initial claims lead both). The historical graph, which I won’t repost this week, indicated that continuing claims also lead the unemployment rate, although with much less of a lead time.
Here is this week’s update of the post-pandemic record for the past two years on a monthly YoY% basis (unemployment rate YoY shown in red):
Since both initial and continuing claims YoY are virtually unchanged, or even lower, I expect the unemployment rate to recede to at least unchanged YoY in the next several months. This would take it back down to the 3.7% or 3.6% area.
Here’s the same comparison on an absolute rather than YoY basis:
This also suggests a lowering at least back down to 3.8%.
The bottom line: no triggering of the Sahm rule.
