– by New Deal democrat
To reiterate my theme from last week, we’re back to the virtuous scenario where almost nobody is getting laid off.
Initial jobless claims last week declined -16,000 to 187,000. Except for one week in September 2022, this is the lowest number in over 50 years (since 1969, to be more precise). The 4-week average declined -4,750 to 203,250, the lowest since last January. With the usual one-week delay, continuing claims declined -26,000 to 1.806 million:
The one caution here is that some of this may be due to seasonal adjustments, which are particularly hard during and just after the holiday season, especially as distorted by the pandemic years.
On a YoY% basis, initial claims were down -6.5%, and the more important 4-week average was down -1.3%. Continuing claims were up 10.5%, which nevertheless was the lowest increase since the end of last March:
All of this bodes well for employment in the next few months.
Finally, since initial claims lead the unemployment rate by several months, for purposes of forecasting the effect on the “Sahm rule” measure of the unemployment rate, the first two weeks of January have averaged a decline of -4.2% YoY:
Since in the first half of 2023, the unemployment rate varied between 3.4% and 3.8%, this forecasts that the unemployment rate in the next few months is going to tend down towards the lower part of that range. Needless to say, this strongly suggests that the “Sahm rule” is not going to be triggered anytime soon.