– by New Deal democrat
Let’s get the easy part of this morning’s slew of data out of the way first: initial jobless claims declined -7,000 to 221,000. The 4 week average declined -3,750 to 233,750. With a one week lag, continuing claims declined -50,000 to 1.690 million:
All of these are generally 5 month lows.
The more important YoY% change for forecasting purposes also declined, to 4.7% for initial claims, 9.1% for the more important 4 week average, and 28.3% for continuing claims:
With two more weeks to go, for the month of July so far, m/m claims are up 8.7%:
My discipline requires that there be 2 months in a row of claims being higher than 12.5% YoY to warrant a red flag recession warning. At this point, it will be almost impossible for the monthly average to cross that threshold. Unless that happens, this re-sets the clock. In other words, if August is bad, that wouldn’t be enough. September would also have to cross the threshold as well.
Nevertheless, although II won’t put up a separate graph, that claims remain higher YoY does suggest that the unemployment rate is also going to climb higher by several tenths of a percent in the next few months – just not enough to come close to triggering the Sahm Rule for recessions.