The good news on jobless claims continued this week, as initial claims declined from -12,000 to 201,000. The four-week moving average also declined, by -3,500 to 215,250. Continuing claims, with the usual one-week delay, declined from -27,000 to 1.862 million:

Needless to say, this also helped the YoY comparisons, which are more important for forecasting purposes. Initial claims are down -7.4%, the four-week average is up a mere 1.1%, and continuing claims are up 8.6%. In the case of the last, that is the lowest YoY comparison since last March:

Recall that continuing claims, considered by itself, triggered some recession comparisons a few months ago. But that was not supported by initial claims, so was a false signal. For initial claims to even trigger a “watch,” let alone a recession warning, they need to be up over 10%, and remain so for over a month.

Finally, here’s the update on the monthly average of initial claims leading the unemployment rate, and thus also leading the Sahm rule for recessions:

The unemployment rate is like to decline in the next few months, or at worst remain steady. Any increase that would trigger the Sahm rule is off the table for now.

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