Initial claims positive to start July, but trend in continuing claims the weakest in 9 years

I have started to monitor initial jobless claims to see if there are any signs of stress.My two thresholds are:

1. If the four week average on claims is more than 10% above its expansion low.
2. If the YoY% change in the monthly average turns higher.

Here’s this week’s update.

Initial jobless claims last week were 209,000. This is in the lower part of its range for the past 18 months. As of this week, the four week average is 9.2% above its recent low, and at 219,250, is 1,500 lower than this week last year:

This remains positive.

Last July, initial claims averaged 215,250. Obviously, 209.000 (blue in the graph below) is below that average, which is also positive – but is only the first of the four weeks that will go into that average (red):

So this too remains positive.

Finally, let’s compare the YoY% change in initial claims (blue) with continuing claims (red):

We see that the comparisons are getting closer to crossing the threshold from lower to higher, and that the YoY change in continuing claims in particular is the weakest it has been during this entire expansion – but they haven’t crossed the threshold yet.