Some post-pandemic unresolved seasonality may be affecting the weekly claims figures, as just like last year, they are declining sharply compared with early August. But on a YoY basis, they are not nearly so positive.

Initial jobless claims rose 3,000 last week to 220,000. The 4 week average declined -5,000 to 224,500. With a one week delay, continuing claims (gold, right scale) rose 4,000 to 1.688 million:

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On the YoY basis more important for forecasting purposes, initial claims are up 14.6%, the 4 week average up 11.8%, and continuing claims up 29.6%:

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Remember that the “red line” is +12.5% sustained for 2 months. While the 4 week average has been up more than 10% for 3 weeks, justifying a “yellow” caution signal, it has not crossed 12.5%.

The most important metric of all for forecasting the unemployment rate is the monthly percentage change. Two weeks into September, it is up 14.8%. Should this be sustained for the month, that would imply the unemployment rate rising to 4% (about 1.15*3.5%) in the next few months:

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This would come very close to triggering the Sahm rule. By no means are we there yet.

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