- by New Deal democrat
As I wrote yesterday, this morning we got a deluge of significant data. I’ll write about personal income and spending later, and the details of Q3 GDP tomorrow. For now, suffice it to say that real GDP was very positive, up 3.4% annualized, and “core” GDP, a/k/a real final sales to domestic purchasers, was even more strongly positive, at 4.9% annualized.
But let me start out with my usual weekly update of jobless claims, which make up 1/2 of my “quick and dirty” forecast, along with stock prices. They have been excellent almost all this year, and this week was one of their “most excellent” of all. Initial claims declined another -1,000 to 194,000, and the four week moving average declined another -1,250 to 196,750. Any time either of these numbers are under 200,000, not only are they among the best since the pandemic, but among the best in the entire nearly 60 year history of the series. Meanwhile, continuing claims, with the typical one week delay, declined -21,000 to 1.701 million:
And the YoY% numbers got even better as well, with initial claims down -12.2%, the four week moving average down -13.2%, and continuing claims down -12.9%:
In short, if real GDP, one of the premier coincident indicators, is very positive, then jobless claims are telling us that should continue at least through this Quarter as well.
Finally, as we close out the month, let’s take a look at what jobless claims forecast for the unemployment rate (red) over the next few months:
The last time the monthly average of claims were this low, which was early in 2023, the unemployment rate in the immediate subsequent months, was several tenths of percent under 4%. The evidence is becoming stronger and stronger that that’s where the unemployment rate is heading between now and the end of the year.
