- by New Deal democrat
Let’s take our regular weekly look at jobless claims. As per my periodic reminder, these are an excellent short leading indicator for the economy, particularly in conjunction with the other half of my “quick and dirty” forecast method, the YoY% change in stock prices.
These have been near historic lows much of this year, and continued in that vein this week. Initial claims rose 1,000 to 199,000, and the four week moving average rose 250 to 198,500. With the typical one week delay, continuing claims declined -4,000 to 1.710 million:
On the YoY% basis more important for forecasting purposes, initial claims were down -10.4%, the four week average down -11.7%, and continuing claims down -11.3%:
This metric continues to be very positive.
Since we’re still early in the month, I’ll dispense with what this means for the unemployment rate (but it certainly means I don’t expect the unemployment rate to increase). So here is the update on the “quick and dirty” forecast mentioned above. Note that since the metric for jobless claims is that they not be higher by more than +10% YoY, that line is inverted, and 10% added:
In contrast to the deteriorating real aggregate payrolls I discussed yesterday, this - like most current leading indicators - remains quite positive. To reiterate: when it comes to gauging the economy, leave your ideological predisposition at the door. In essence, the AI Boom (or bubble) is outweighing all the other economic determinants at the moment.
