Jobless Claims Continue To Forecast A Very Positive Economy In The Near Term

Let’s take our regular weekly look at one of the most positive recent signs for the economy, initial and continuing jobless claims.

And they continued to be very positive. Initial claims rose 9,000 for the week to a still very tame 209,000, while the four week moving average was unchanged at 199,000. As a reminder, aside from several weeks in 2022, this average has not been below 200,000 for over half a century, when the US population was only about 1/2 of what it is now. Continuing claims, with the typical one week delay, declined -22,000 to 1.777 million:

As per usual, for forecasting purposes what we want to look at is the YoY comparison, and there initial claims were lower by 6.7%, the four week average by -10.3%, and continuing claims by -8.5%:

As I said above, this continues to be a very positive short leading indicator for the economy.

Finally, since it’s early in the month I won’t update the implications for the unemployment rate going forward this week. Instead, here is an update of the “quick and dirty” forecast model that includes the inverse of the YoY change in the four week average, plus the YoY change in stock prices:

Combined, these are the most positive they have been since the immediate post-pandemic Boom.