I’ll post on personal income and spending a little later.

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But first, initial jobless claims declined -4,000 to 228,000 last week. The more important 4 week average increased 250 to 237,500. With a one week delay, continuing claims increased 28,000 to 1.725 million:

For forecasting purposes, the YoY% change is more important. There, initial claims are up 10.6%, while the 4 week average is up 13.0%. Continuing claims are up 28.4% YoY:

Note that YoY comparisons in the coming couple of months will be very challenging, as they will be against the lowest of all the post-pandemic numbers.

Finally, here is the monthly average of claims (blue, left scale) which is up 13.0% YoY, vs. the YoY change in the unemployment rate (red, right scale). Remember that the former has a long history of leading the latter with a lag of a few months:

In summer and autumn of last year the unemployment rate averaged 3.6%. Initial claims suggest that unemployment will rise towards 4.0% in the coming months. This is not quite enough to trigger the Sahm Rule, which requires an average YoY increase of 0.5%, but on the other hand that initial claims are up more than 12.5% YoY crosses the threshold restarting the yellow caution flag. A full two months of such numbers are required for a recession warning.

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