Initial jobless claims rose significantly last week, up 13,000 to 242,000, the highest level since last August. The four week moving average rose 4,750 to 227,000, the highest level since last September. And with the usual one week delay, continuing claims rose 30,000 to 1.820 million, the highest since this January:
There is no doubt at this point that jobless claims are in a significant uptrend. But note from the graph that there was a very similar increase last spring and summer, which is why as I have been reporting on these numbers for the past month that I have cautioned that there may be some unresolved post-pandemic seasonality in play.This shows up even more clearly when we look at the YoY% changes, those most important for forecasting purposes. YoY initial claims are nevertheless *down* -10.2%, and the four week average down -6.7%. Both of these comparisons are the lowest in 16 months except for a few weeks in February and March in the case of the former, and only one week in March in the case of the latter. And while continuing claims remain higher YoY by 4.4%, that comparison remains lower than at any point in the past 15 months except this April and May:
So the bottom line is, claims are clearly in an uptrend, but it is less of an uptrend than occurred at this very same time last year – an indication that unresolved seasonality may be at work. And because initial claims are down YoY, they are not recessionary but rather consistent with a continuing expansion.Finally, here is the update on initial and continuing claims vs. the Sahm Rule:
As I have noted many times, there is nearly a 60 year history of the former leading the latter. There have been only a few other occasions during that history when the unemployment rate drifted higher in similar circumstances. Because that is best examined in the course of the discussion I started in Monday and Tuesday’s posts about a likely large population undercount in the Household Survey having to do with immigration, I will look at this issue in more detail in that context, hopefully (if I am industrious) tomorrowMore By This Author:May CPI Continued To Be All About Shelter What Would Adjusting The Household Jobs Survey For Immigration Driven Population Growth Do? The Recessionary Household Jobs Survey Is Not Confirmed By Other Comprehensive Hard Data
