I’ll report on the Q4 GDP release later this morning. But first, let’s get up to date on jobless claims. These have been trending higher YoY, but with lots of seasonal noise, which should now be over.

For the week, initial claims declined -16,000 to 207,000. The four week moving average declined -1,000 to 212,500. With the typical one week lag, continuing claims declined -42,000 to 1.858 million:

Most significant about the above is that continuing claims, as revised, remained at 1.900 for the first time since the pandemic. There is definitely a weakening trend that began last June and intensified during the autumn.

As usual, the YoY comparisons are more important for forecasting purposes. So measured, initial claims were lower for the first time in two months, down -8.0%. The four week average was up 1.4%, and continuing claims were up 1.6%:

This continued the 5 month string of higher YoY comparisons in the latter two measures. These continue to qualify as neutral readings, consistent with a tepid but growing economy, so long as we don’t go above 10% YoY.

Finally, here’s this week’s update of what this might mean for the unemployment rate when January’s jobs report comes out:

Last week I changed this format slightly, by including the total of initial + continuing claims in gold, since the unemployment rolls include people looking for work on both new and continuing basis. Note also as usual that the unemployment rate data is rendered as the % change in a %. Since in the months around one year ago the unemployment rate averaged 3.8%, this suggests that it ought to be tending towards a 4%-5% increase in that, or approximately 4.0%, vs. December’s unemployment rate of 4.1%. 

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