Jobless Claims: Seasonality Returns, But Remains Very Positive For The Economy

This morning, a plethora of economic data was released, including personal spending and income, manufacturers’ new orders, motor vehicle sales, and jobless claims. Since tomorrow sees no significant data releases, I’m going to hold the in-depth look at spending and motor vehicle sales until tomorrow and update the other releases today.

Let’s start with the typical weekly look at jobless claims, 1/2 of my “quick and dirty” forecasting method. To reiterate, the issue I’ve been looking at is whether post-pandemic seasonality is reappearing or whether the “regime change” of significantly lower YoY claims that started last July is intact.

And the apparent answer is: both.

Initial claims declined -12,000 to 215,000, while the four-week average rose by 750 to 224,250. With the typical one-week delay, continuing claims rose 21,000 to 1.821 million:

Excluding the immediately preceding three weeks, this week’s initial claims number is the highest all year except for two weeks in February and one in April, and the four-week average is the highest since last November. This very much looks like the return of post-pandemic residual seasonality.

But on a YoY basis, the very positive comparisons continue, as initial claims are down -8.9%, the four-week average down -7.4%, and continuing claims down -7.1%:

This is in line with the excellent YoY comparisons we have seen almost all of this year.

To synthesize, it would appear that while post-pandemic seasonality has reappeared, it is at a lower level that from 2023-2025. Which is very positive for the near term economy.

Finally, let’s do our update of what this might mean for the June unemployment rate when that report is released next week. Unsurprisingly, it continues to show that downward pressure will continue to be exerted on that rate. I would not expect the rate to increase from 4.3%, and there is a very good chance it declines:

The positive news continues.