It appears that, as I suspected earlier this month, the big YoY jump in initial jobless claims was largely due to the effects of the hurricanes, and is now abating.First, for the week initial claims declined another -12,000 to 216,000. The four week moving average declined -2,250 to 236,500. With the typical one week delay, continuing claims declined -26,000 to 1.862 million:
The good news is that, on the more important YoY% change basis for forecasting purposes, initial claims were completely unchanged from one year ago. The four week moving average remained higher by 12.4%. By contrast, for the past two weeks (light blue in the graph below), initial claims were up only 7,500 from one year ago, or +3.5%. Continuing claims were higher by 2.5%:
These are quite simply not recessionary at all.Even more striking, the situation would be even better excluding Florida, which was so heavily impacted by Hurricane Milton. Compared with one week prior, initial claims in Florida one week ago were higher by 4,500 (not seasonally adjusted) and were higher YoY by 7,100. In fact, half of all initial claims in the US were in Florida. In other words, initial claims one week ago would probably have only been higher by about 3.5% excluding Florida.If this situation goes on one more week, we can safely put the two week scare from earlier this month behind us.Finally, here is the look at initial and continuing claims vs. the unemployment rate, since the former leads the latter:
The unemployment rate has been rising due to new entrants (immigrants) into the labor force having a harder time finding work. The suggestion is that with recent weakness in claims, it will probably rise another 0.1% or 0.2%, although not necessarily tomorrow.More By This Author:Real GDP For Q3 Nicely Positive, But Long Leading Components Mediocre To Negative JOLTS Report For September Shows Continued Decleration In Almost All Metrics Repeat Home Sales Accelerate Slightly Monthly, But Continue To Show YoY Deceleration
