- by New Deal democrat
Let’s take our weekly look at jobless claims. As a reminder, I pay attention to these because they are a good short leading barometer of the economy in general, and the jobs market in particular.
And the news this week continued to reflect the “new regime” of lower YoY claims that we have seen for the past 8+ months, as well as the post-pandemic unresolved seasonality in which claims generally rise from the beginning of the year until mid-year.
Initial claims were unchanged at 213,000, and the four week moving average declilned -4,750 to 215,750. With the typical one week delay, continuing claims rose 46,000 to 1.868 million:
As per usual, the YoY% change is more important for forecating purposes. Here, the news was all positive. Initial claims were down -4.9%, the four week moving average down -4.7%, and continuing claims down -1.3%:
All of which is very inconsistent with any near term onset of a recession.
Finally, as per usual let’s take a look at what this might mean for the unemployment rate in the next several months:
Jobless claims continue to forecast downward pressure on the unemployment rate towards 4.2% or even 4.1%. We’ll find out tomorrow.
The bottom line is that initial claims, like some of the other short leading data like the improvement in manufacturing, suggest that although it is touch and go, the US economy would be increasingly likely to avoid a recession this year.
I said “would be” rather than “will” because of the ongoing geopolitical idiocy that is the war with Iran — and I believe “war with Iran” is the appropriate term. This is not a “touch and go” like Venezuela. Yesterday our navy sank an Iranian frigate near Sri Lanka, 1000 miles away from the Persian Gulf. And since we just killed all of the immediate family of Iran’s new Supreme Leader, I do not think he is going to be interested in a cessation of hostilities anytime soon.
