We are in the part of the year when, post-Covid, likely residual seasonality has resulted in a declining trend in new jobless claims. 

Not this year.

On a week over week basis, initial jobless claims did decline -33,000 from last week’s outlier 264,000 to 231,000, and the four week averaged declined -750 to 241,000. With the typical one week delay, continuing claims declined -7,000 to 1.920 million:
 

On the YoY basis more important for forecasting purposes, however, initial claims were higher by 4.1%, the four week average by 5.3%, and continuing claims by 5.1%:

These are neutral readings, consistent with a slowly expanding economy. Nonetheless, I find this noteworthy because, along with sharply rising stock market prices, during the summer they were one of the few strongly positive short leading indicators. This has now disappeared.

Finally, let me update the relationship with the unemployment rate. A reminder that initial claims have a long history of leading the unemployment rate, and initial + continuing claims are even more accurate although they only lead slightly.

Here’s the current situation expressed in YoY% changes:
 

After a brief detour in July and most of August, with both initial and continuing claims having resumed their trend of being higher YoY, this suggests that the unemployment rate in the next several months is likely to be 4.3% or 4.4%, i.e., 1.05x the 4.1% and 4.2% readings of one year ago.

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