Jobless Claims, The Most Positive Data Of All, Continues To Augur For Lower Unemployment

The most positive metric in all of economic metric-dom continues to be very positive. Initial jobless claims rose 10,000 to 200,000 last week, still among the lowest readings over the entire past 50+ years. The four week moving average declined -4,250 to 203,250, also among the lowest in the past 50+ years. And continuing claims, with the typical one week delay, declined -10,000 to 1.766 million, the lowest since January 2024:

For all intents and purposes, nobody is getting laid off.

On the YoY% basis more important for forecasting, initial claims were down -12.3%, the four week average down -10.5%, and continuing claims down -5.9%:

This is very positive. In fact, YoY values this much lower have in the past been associated with economic expansions when they were very strong, as shown in the below graphs which norms the current YoY% changes to 0:

Interestingly, the only exception was 1973, when the Arab Oil Embargo caused the economy to reverse quickly.

Finally, the big decline in jobless claims over the last few months very strongly suggests not only that the unemployment rate will not increase from its 4.3% level in March, but potentially could decline all the way to 4.0% in the next several employment reports:

We’ll see how that plays out for April in tomorrow’s jobs report.