- by New Deal democrat
With other news (finally!) out today, let’s take at least a brief look at jobless claims.
Initial claims declined -1,000 to 206,000, while the four week moving average declined -1,500 to 205,000. With the typical one week delay, continuing claims declined -1,000 as well to 1.774 million. These all continue to be extremely low numbers, close to the low end of the entire 60 year series:
I’ll dispense with the graph this week, but the more important YoY% changes are pretty dramatic, as they are in comparison to a Labor Day spike last year. Initial claims were down -21.5%, the four week moving average down -15,9%, and continuing claims down -7.9%.
Jobless claims, along with stock prices, compose my “quick and dirty” forecasting tool. With stock prices still up over 15% YoY, they continue to suggest a solid expansion over the next few months (oil price shock permitting). [Note: There is an issue with FRED updates today. If and when the information is posted there, I will update here]
Aside from the fallout from the Iran war, the one big thing that concerns me is just how much of consumer spending - which, again, is about 70% of the economy - has been dependent on the wealth effect from stock market gains this year. To the best of my knowledge, this is the first time since the Roaring ‘20’s of 100 years ago that so much spending has been downstream of the stock market. While I am absolutely *not* forecasting any sort of similar crash, the fact is that this dependency creates a very real possibility of a stock market downturn feeding on itself via the effect it would have on consumer spending.
