Let’s get the easy part of this morning’s slew of data out of the way first:  initial jobless claims declined from -7,000 to 221,000. The 4-week average declined from -3,750 to 233,750. With a one-week lag, continuing claims declined from -50,000 to 1.690 million:

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All of these are generally 5-month lows.

The more important YoY% change for forecasting purposes also declined, to 4.7% for initial claims, 9.1% for the more important 4-week average, and 28.3% for continuing claims:

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With two more weeks to go, for the month of July so far, m/m claims are up 8.7%:

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My discipline requires that there be 2 months in a row of claims being higher than 12.5% YoY to warrant a red flag recession warning. At this point, it will be almost impossible for the monthly average to cross that threshold. Unless that happens, this re-sets the clock. In other words, if August is bad, that wouldn’t be enough. September would also have to cross the threshold as well.

Nevertheless, although II won’t put up a separate graph, that claims remain higher YoY does suggest that the unemployment rate is also going to climb higher by several tenths of a percent in the next few months - just not enough to come close to triggering the Sahm Rule for recessions.

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