Today and tomorrow update the two remaining positive sectors of the economy: jobs and real personal income. And the first one continued to give excellent historical readings, but relatively speaking suffered in comparison to their all-time best readings from exactly one year ago.

Initial jobless claims rose 7,000 to 198,000, while the more important 4-week average rose 2,000 to 198,250. By any historical measure, these are excellent readings. Continuing claims, with a one-week delay, rose 4,000 to 1,689,000 also historically very good:

(Click on image to enlarge)

Note that the “high” readings at the left end of the graph, from November 2021, would have been considered extremely low during any previous economic expansion.

The fly in the ointment, as I wrote above, is that on March 19 of last year, initial claims made a 50+ year low of 166,000, and the 4-week average made its all-time low of 170,500 on April 2 of last year. Thus the YoY% change is over 15% for the former and over 11% for the more important 4-week average:

(Click on image to enlarge)

Per the historical record, if the 4-week average is more than 10% higher for a month or more, that is a yellow flag for a potential recession. If it gets close to 15%, it is a red flag. As I indicated above, next week will be the “worst” comparison week. By mid-May of last year, the average was back over 200,000. So I suspect we won’t get there unless there is significant deterioration in the next few weeks.

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