Initial claims declined -6,000 last week to 233,000. The four week moving average increased, however, by 3,000 to 236,000, the highest since last September. Continuing claims, with the usual one week delay, increased 18,000 to 1.839 million, breaking out of their 12 month range to the highest level (by 10,000) since November 2021:

On the YoY% basis which is more useful for forecasting, the news is still pretty good. Initial claims remain down -2.1%, and the four week average down -6.9%. Continuing claims are higher by 5.1%, still at the lower end of that range:

Last week in discussing possible unresolved post-pandemic seasonality, I noted that beginning this week last year there was a significant decline in new claims. As data will do, this week’s numbers were ambiguous, as in down, but not by as much as last year. So we will have to wait at least one more week to see if the hypothesis pans out or not.

Finally, here’s the updated look at the “Sahm rule” as forecast by initial and continuing claims averaged monthly:

The upturn in the two former metrics in June suggests the the unemployment rate may trend slightly higher in the coming months. At the same time, recall that it is *extremely* unusual for the unemployment rate to have risen in the face of the downturn in jobless claims earlier this year, which I suspect has been caused by the surge in new immigrants failing to find employment as easily as they did in 2021-23.

The bottom line is that the “Sahm Rule” is unlikely to be triggered in next week’s jobs report, but will probably remain at elevated risk.

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