Jobless claims: close but no cigar for the red flag – by New Deal democrat Initial claims declined -9,000 to 228,000 last week, and the four week average declined -9,250 to 237,500. Continuing claims, with a one week delay, rose 33,000 to 1.754 million: More importantly for forecasting purposes, initial claims are up 7.0% YoY, the four week average up 10.6%, and continuing claims up 30.8%: Just as importantly, the average for July so far is about 233,000, only about 8.4% above last year’s average for the month. My discipline requires 2 straight months, or 8 weeks in a row, of comparisons higher by 12.5% or more YoY. Otherwise, the spike could just be transitory noise. Thus, with this week’s number, the chain has been broken. Unless
Topics:
NewDealdemocrat considers the following as important: Hot Topics, jobs, July 2023, New Deal Democrat, US EConomics
This could be interesting, too:
NewDealdemocrat writes Retail Real Sales
Angry Bear writes Planned Tariffs, An Economy Argument with Political Implications
Joel Eissenberg writes Will DOGE be an exercise in futility?
Bill Haskell writes Funding Public Goods Problematic??? Blame the Tax-Dodging Billionaire
Jobless claims: close but no cigar for the red flag
– by New Deal democrat
Initial claims declined -9,000 to 228,000 last week, and the four week average declined -9,250 to 237,500. Continuing claims, with a one week delay, rose 33,000 to 1.754 million:
More importantly for forecasting purposes, initial claims are up 7.0% YoY, the four week average up 10.6%, and continuing claims up 30.8%:
Just as importantly, the average for July so far is about 233,000, only about 8.4% above last year’s average for the month.
My discipline requires 2 straight months, or 8 weeks in a row, of comparisons higher by 12.5% or more YoY. Otherwise, the spike could just be transitory noise. Thus, with this week’s number, the chain has been broken. Unless there are sharp increases in new claims in the remaining weeks of July, there is no red flag recession signal.
Despite that, since initial claims lead the unemployment rate, a slight increase in the unemployment rate during the next few months is still forecast:
Keep in mind that the unemployment rate in the above graph is rendered as a “percent of a percent,” so even a 10% YoY increase from 3.5% would sill only be about 3.9%, not enough to trigger the Sahm Rule.
Initial jobless claims: moving closer to a red flag warning, Angry Bear, New Deal democrat