Jobless Claims: Good News All Around

This was one of the best weeks for jobless claims all year. Initial claims declined from -17,000 to 202,000, a tie for the 2nd lowest number in 10 months. The four-week average declined from -7,750 to 213,250. With the usual one-week delay, continuing claims rose 20,000 to 1.876 million:

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Even more importantly for forecasting purposes, the YoY% changes both for the weekly number and the four-week average were negative, i.e., lower than one year ago, at -1.9% and -0.1% respectively. Meanwhile, continuing claims, while elevated at +17.2%, are nonetheless lower on a YoY basis than at any point in the past 8 months:

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This makes initial claims an outright positive for the economy in the near future. And it cuts against the idea that continuing claims were forecasting a recession.

Since initial claims lead the unemployment rate, this also adds a level of comfort to the forecast that the elevated comparisons earlier this year will not trigger the “Sahm rule” as to the YoY change in the unemployment rate:

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