US Unemployment Claims Weekly Chart; 4-Week MA Shows Claims Rising for 9 Months Indicating Recession Ahead

The unemployment claims typically trend higher when a recession is on the come. Yesterday's claims are the highest since Halloween 2021 (for last 3 weeks). The chart shows the moving average bottoming last September 2022 and layoffs and firings trending higher for 9 months. The recession, however, remains with Godot, and is not showing-up yet. Recession is far closer than anyone realizes.

It is like when writer Ernest Hemingway was asked about going into bankruptcy. He said it occurs in two ways, first gradual, then all of a sudden.

Keystone's prior unemployment claims charts from March and a couple weeks ago are linked here. DOL data linked here. The revisions are worsening the picture as time plays out but traders, analysts and pundits only remember the happy number on the release. The last two claims numbers are up at 264K claims and the 4-week MA is up to 255,750 claims the most since Fall 2021.

It is important that the brown moving average line moves above the prior highs which indicates more trouble ahead. Unemployment claims tell you a recession is on the come but the wealthy class keeps spending money keeping the economy afloat.

If you are a young person, realize that you, your significant other, or both of you may get laid off over the coming months or year or two. Many of you will say the boss told you that the company could not survive without you. They only tell you that to get more work out of you and make you feel good, jackass. Your boss will drop-kick you to the dumpster at the end of the parking lot in a heartbeat and not even bat an eyelash. Pack-up your family pictures, over-watered houseplants and change for the coffee machine from the top desk drawer and get the Hell out. Oh yeah, hand your door badge in as well. Now beat it.

Plan for troubled times especially since all of you young people have not seen a real recession. This link to a prior Keystone article that went viral may help you understand what is coming. Recession will change all your lives forever. The Boss's song "The River" was a theme song for the rough 1980-1982 recession, the worst economic time since The Great Depression. The memories haunt me like a curse. 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 Friday Morning, 6/23/23, at 11:25 AM EST: Treasury Secretary Yellen pooh-pooh's the talk of recession. Janet looks under the buffet table and opines, "Nope, no recession here." She looks behind the curtains and announces, "No recession here, either." Yellen says the house construction and retail sales data remains strong and the labor market is resilient. Well, she needs to look at Unemployment Claims over the last 3 weeks. Meanwhile, Eurozone PMI's sh*t the bed some falling back into contraction. Ditto Japan. The eurozone manufacturing weakness sends the euro lower and US dollar index higher sinking US stocks. European chemical companies are taken to the shed behind the garage and beaten mercilessly. If the economy does not need resins, chemicals and paints, well, you do not have a recovery, you have a sick economy going forward. As they said in The Graduate, hello Mrs Robinson, you look lovely today, the key word is "plastics." Profit warnings from the chemical industry are bad news. The services sector is rolling over in Europe (generally, right now in the US and Europe, goods are disinflationary and deflationary while services remain inflationary but probably for not much longer; services will roll over and join goods). Automaker Ford announces new layoffs. How's those glorified golf carts (EV's) going, buddy? What idiot buys an EV when there is a gas station on every corner? The auto golf carts do not work in a power outage or natural disaster. Buy yourselves some good walking shoes if you buy an EV. In a power outage, you will be stuck at home unable to go anywhere, with a 1-ton hunk of junk sitting in the garage, unless you walk. A gasoline car can get you coast to coast effortlessly if you decide to take a trip on a whim. An EV requires pre-planning of your trip; 'good luck wit dat EV, sucka', as they say in the Bronx.

Note Added Saturday, 6/24/23: Federal Reserve data indicates a 71% chance of recession the highest numbers ever and in the past, a recession has occurred within 12 months every time. This activity has been ongoing so the recession will be here, say, by April 2024 or sooner. Thus, the US will be in recession either now going into and through Q3, or Q4, or Q1 2024. Choose your poison. The chart above hints that the recession will be here sooner not later so Q3 (July, August, September) and/or Q4 (October, November, December). Keystone will end up with nothing in his Christmas stocking this December not even the typical chunk of coal. 

Note Added Sunday, 6/25/23: The US PMI is 53.0 slipping lower but remaining above the 50 level that separates economic expansion from contraction. The manufacturing recession continues with the US Manufacturing PMI at 46.3. Services PMI is holding-up at 54.1 as long as America's upper middle class and privileged elite, that screwed everyone else over the last five decades, keep spending money.

Note Added Thursday, 6/27/23: The Case-Shiller index falls year-on-year for the first time in 12 years. The home-price reset phenomena is over. Home prices are dropping. New Home Sales pop +12.2% on-month and +20.0% on-year. People that need a home, and have the money, have to build one since folks are remaining in their houses enjoying a low mortgage rate (they do not want to move and end up with a far higher mortgage rate). Analysts and television pundits proclaim a housing recovery is in progress and there is nothing but blue skies and rainbows ahead.

Note Added Wednesday Morning, 6/28/23, at 6:16 AM EST: The Ford layoffs include engineers. Not good. Google is laying off employees. The tech layoffs are mounting including Mister Softy (Microsoft), Scamazon, Google and dozens of smaller firms and start-ups. When the economy fades, the start-ups and other research-type projects are first to get axed and the employees on these projects are sh*t-canned. If you are working now, make sure you do not charge any time to overhead; if you do, you will be laid off. If you have a few hours of time that cannot be charged to a client or customer, ask your boss for more work since that may keep you off the layoff list a bit longer. Even if the work is not there to give you, the boss will remember that you showed initiative and he may keep you around a bit longer. Banking giant UBS, merging with Credit Suisse, announces that one-half the workforce at CS will be canned. Ford, General Motors and other automakers are laying off workers. When the engineers are axed, that signals recession. The engineers and tech jobs are high-paying so consumer spending takes a hit. What people forget about at the start of recessions, is the impact that layoffs have on society and the workers that still have jobs. The day after a company announces layoffs and kicks workers to the curb, the boss calls a meeting for the workers remaining and tells the b*tches to pick up the pace and perform the work of the sh*t-canned workers and not moan about it. Anyone complaining will be next in line to be axed. Neighbors and relatives hear that smart Johnny lost his job and wonder if their jobs are in jeopardy. People will cut back on spending for fear of losing their jobs even if they have a secure job. This pullback accelerates the recession and things fall apart quickly. It typically starts going downhill fast with the recession monster starting to growl strongly when you hear that engineers, accountants, tech workers, programmers and other highly-paid employees are canned.

Note Added Wednesday Evening, 6/28/23, at 7:26 PM EST: Federal Reserve Chairman Powell, at the central banker meeting in Portugal, proclaims, "....it's so uncertain right now, in my view, the least unlikely case is that we do find our way to better balance with without a really severe downturn." Huh? Powell continues, "I think there's a, there's a, significant probability that there will be a downturn as well though, but that is not to me the most likely case." Say what? Can you make sense of that? Whatchu talkin' 'bout Willis? Powell is a traditional two-handed economist. On the one hand, and then on the other hand.... If he expects a recession, why is he raising rates? The world is in uncharted waters but each central bank claims to own the correct map for the path forward.