Last week I wrote that, compared with the onset of previous recessions, in which a rise of initial claims of 10% or more off the bottom was almost always required, the current situation only appeared to support slow growth but not actual contraction.
This week’s number makes for an even more dramatic comparison. As of now initial claims are less than 2% higher than their lowest point in the recovery:
Suffice it to say that we are now well below the lower bound of the past conditions required for consistency with the onset of actual economic contraction.
With the addition of this week’s data, once again last year’s pattern of an increase during the second quarter which subsided in the third quarter is so far being repeated this year:
When we measure weekly, as opposed to by the 4 week average, we see that the two lowest weekly claims reports of the entire recovery have been this month:
If, despite new lows in weekly claims being made and the 4 week average being only 1%+ off its bottom, we are in a recession anyway, then initial jobless claims have lost almost all use as leading indicators.
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