US Unemployment Claims Weekly Chart; Claims Rise for 6 Weeks Hinting at Recession Ahead

The Unemployment Claims increased substantively on Thursday to 211K well above the 200K level a big 21K increase for the prior week that was unrevised at 190K claims. Analysts are quick to blame a surge in New York teachers claims but even taking away 15K would still be a 6K increase and continue to send the 4-week moving average higher.

The 4-week moving average is up to 197K claims per week from 193K per week for the prior week. The moving average is up for 6 weeks again signaling that a recession is on the come and likely approaching far faster than anyone realizes.

Considering the fits and starts, however, do the old metrics at predicting oncoming recessions still carry water? In this era of 14 years of Federal Reserve money printing (monetary stimulus) and 3 years of COVID-19 government spending (fiscal stimulus), no wonder the signals are mixed and switching back and forth. One thing is for certain, however, the free money from the government is pretty well spent.

Instead of preparing for the oncoming recession as young people should be doing right now (read this if you need a reality check on how a recession will change your life), the naïve dolts are buying boats, and fancy clothes, and gadgets, and costly dinners, and video games and posting their latest 'experience' on Facebook. Experience this. Young folks need to prepare for the oncoming recession especially since most of you have not experienced a hard couple-year recession in your life. A lot of you will grow-up over the next couple years.

Each week the 4-wk MA moves higher is another week that you come closer to receiving the call from the boss telling you to come back to his/her office where you will be sh*t-canned, told to pack-up, and get out of the building within 15 minutes. You will also need to hand in your badge and card so you can no longer enter the building. 'But boss, you said the company could not survive without me'. 'You little twit, that is what you tell all employees to squeeze more work out of them'.

The prior Claims chart from 3 weeks ago is linked here for further discussion and explanation. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added on Thursday Morning, /16/23, at 8:49 AM EST: Claims are 192K coming in less than expected but the 4-week MA remains at 197K claims per week. Next week's claims will either roll the 4-wk MA over to the downside making those not believing in recession happy, or, the moving average will resume the move higher after the flatness reinforcing the theme that the recession is coming. The mixed market signals continue. For next Thursday, 3/23/23, if claims are above 197K, the recession is on its way, if the claims fall below 197K, the recession will be delayed and the economy will be deemed okay.