Ever since jobless claims started higher in May, I’ve cautioned that I suspected that unresolved seasonality may be at play. This week and the next two weeks are the acid test for that hypothesis, because they were the lowest weeks for claims all last summer.

And . . . The unresolved seasonality hypothesis held up for the first of those weeks.

Last week initial claims declined -17,000 to 222,000 - a lower number than any week last summer. The four week average declined -5,250 to 233,500. With the usual one week delay, continuing claims declined -4,000 to 1.852 million:

But of course, if seasonality is at play, the YoY numbers should be benign. And they are.

YoY initial claims are down -3.6%. The four week average is down -4.6%. Continuing claims, which have been higher YoY for many months, are close to the bottom of that YoY range, higher by 4.6%:

Since the YoY metrics are most important for forecasting purposes, this continues to be a positive sign for the economy.

Finally, although I’ve cast doubt on whether the “Sahm Rule” is giving an accurate signal this time around because of the huge impact of recent immigration, here is an update through the first week of July for that comparison:

Initial and continuing claims are more consistent with an unemployment rate of perhaps 3.8%, not 4.1%. I strongly suspect the recent increase in the unemployment rate is indeed recent immigrants who have been unable to find permanent jobs yet.

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