Initial jobless claims: moving closer to a red flag warning – by New Deal democrat Initial claims for jobless benefits rose 12,000 last week to 248,000. The 4 week average declined -3,500 to 253,250. With a one week lag, continued claims declined -13,000 to 1.20 million: More importantly for forecasting purposes, initial claims are up 17.1% YoY. The more important 4 week average is up 18.1%, and continuing claims are up 27.0%: This is the 4th week in a row that the 4 week moving average has been up by more than 12.5% YoY. Additionally, averaged monthly initial claims were up 18.5% for the month of June in its entirety: This is the first month that claims have been higher YoY by more than 12.5%. If they remain higher than 12.5% for
Topics:
NewDealdemocrat considers the following as important: Hot Topics, initial jobless claims, July 2023, New Deal Democrat, US EConomics
This could be interesting, too:
NewDealdemocrat writes JOLTS revisions from Yesterday’s Report
Joel Eissenberg writes No Invading Allies Act
Bill Haskell writes The North American Automobile Industry Waits for Trump and the Gov. to Act
Bill Haskell writes Families Struggle Paying for Child Care While Working
Initial jobless claims: moving closer to a red flag warning
– by New Deal democrat
Initial claims for jobless benefits rose 12,000 last week to 248,000. The 4 week average declined -3,500 to 253,250. With a one week lag, continued claims declined -13,000 to 1.20 million:

More importantly for forecasting purposes, initial claims are up 17.1% YoY. The more important 4 week average is up 18.1%, and continuing claims are up 27.0%:

This is the 4th week in a row that the 4 week moving average has been up by more than 12.5% YoY.
Additionally, averaged monthly initial claims were up 18.5% for the month of June in its entirety:

This is the first month that claims have been higher YoY by more than 12.5%. If they remain higher than 12.5% for July, that will trigger a red flag recession warning. In the above graph I have also shown the YoY% change in the unemployment rate. This is a “percent of a percent.” The unemployment rate was 3.6% in June 2022. Since initial claims leads the unemployment rate, this suggests that it will rise 0.36% (or possibly more) above that rate in the coming months, or up to about 3.9%. This would not yet trigger the “Sahm Rule,” with retroactively tells us we are already in a recession, but it would be much closer.
Yellow flag from initial jobless claims turns a little more orangey, Angry Bear, New Deal democrat