US Unemployment Claims Weekly Chart; Half-Year Sideways Malaise Continues Delaying Arrival of US Recession

The US Jobless Claims from the BLS are a key metric for assessing the onset of a US recession, or at least they used to be. The weekly data can be scattered and jumpy so the 4-week moving average (MA) is important in smoothing out the noise.

US Unemployment Claims have trended higher for the last year (red channel) despite the news media reporting the whole time that all is groovy. However, the subtle rise in claims does not usher-in a recession as would be expected.

Instead, this summer, during the AI orgy, as the stock market catapulted higher, businesses decided it is better to keep the employees on the payroll since the economy is still chugging along fine thanks to the spending by the upper middle class and wealthy elite that raped America's crony capitalism system for all its worth over the last decade and more.

You can see claims peak in the summer as the good news about the economy becomes rampant with rising stock prices. The green channel shows how claims are now in a descending trend for the last 3 months. This is likely one of the main reasons you hear the analysts on television proclaim that there will be no recession and only a soft landing exists in our future.

But not so fast. The purple channel, yes, the chart is starting to look like a bowl of spaghetti, is also now in play highlighting the overall sideways behavior in claims for the last half-year.

After over a decade of Federal Reserve money printing and more recently, the COVID-19 pandemic super stimulus parade, the wealthy class and companies remain flush with cash so they can afford to keep employees around even if they spend half the day surfing the internet, talking on the phone, updating the filing system or cleaning-up the copy machine room.

Charging time to overhead is the kiss of death. You always want the company to make money off of you being there. If you are doing busy work these days and billing time to overhead tasks, plan that you will lose your job and be laid off, sh*t-canned, in the weeks and months ahead. Companies will only keep your unproductive arse around for so long; after a while, or if business does not pick up as expected, they will drop-kick your butt into the dumpster at the far end of the parking lot.

Claims fell to two hundo thousand on Thursday, 9/21/23, the last data point on the chart, and the 4-wk MA is at 217K. It will be a big deal on Thursday, 9/28/23, if claims come in sub 200K. It will show that this recession indicator is completely busted and useless these days due to the many years of obscene Fed money printing (monetary stimulus) and Congress's unabashed fiscal stimulus spending.

The interesting aspect of companies keeping workers on the books even if they are unproductive (for fear of laying them off and then not being able to hire them back if business improves) is that when the recession hits, and it will hit, the spike in claims will be a spectacular event.

Not spectacular from the standpoint of people losing their livelihoods, but rather the magnitude. Using claims as a recession indicator will regain its value when companies realize that the US is sliding into troubled times. The increase in claims will not be subtle like over the last year. Considering that people are holding on to workers, when they see the light that the good times are not coming, the claims will likely catapult higher like a rocket. There will be no ambiguity, claims will likely shoot to 300K in a heartbeat leaving the entire chart in the dust.

Until then, times are groovy and everyone is walking along in Itchycoo Park. It's all too beautiful. Let's see. Something else is of interest from the perspective of Management 101; holiday layoffs. Businesses never want to sh*t-can employees around the holidays. The company receives bad publicity and their reputation may be damaged when they throw little Timmy, that is confined to a wheelchair, out into the street days before Christmas.

The holiday season is Thanksgiving around the third week of November, Christmas on 12/25/23, and New Years. You can lump Halloween in there since that kicks off the move into the holiday season. Thus, if you are an employer, you have to now decide if you want to keep that unproductive employee on the payroll into the new year.

Typically, if you get laid off the second week of November or later, the company is going to be called every name in the book. How can they be that uncaring to kick people out into the street before the holiday? To avoid the bad reputation risk and handle the situation smoothly, companies will lay off workers the first week of November or sooner. The last week of October would be a good time to can folks since they could not complain as much that it was near the holidays.

Companies realize that if they keep the dead weight around hoping for business to pick-up, and they are keeping those workers into mid-November, they will have to fork over all that holiday pay into the new year. If business is shaky, you do not want to commit to all that outlay of expenses for many weeks hoping the economy improves. It may be time to cut bait.

What does all this windbag talk mean? What it means is that if you see an increase in claims, it is coming over the next 5 weeks. If the claims remain benign into the November Rain, Slash's crying guitar is unforgettable, the soft landing people will have something to hang their hats on and it may become a reality.

If you have been doing busy work at your job, and think that is fun getting paid for basically standing or sitting around all day, you must understand that you will probably be canned over the next 5 weeks. You would be smart to diligently look for a new job now and jump ship before it hits the fan. Companies are not going to let your deadbeat arse come into work each day to lay around into the new year.

Using Unemployment Claims as a recession indicator may be a bust due to the sick direction of America's crony capitalism system especially in recent years. The next couple months, especially the next 5 weeks, are going to tell a lot about the labor picture.

One more thing to chew on is chips. No, not potato chips, semiconductors. The US has been in a housing recession all year long and a manufacturing recession for many months as well and this has not brought on a recession. That is because of the new kid in town; chips. A chip is in almost every product these days.

Semiconductors and Doctor Copper are key indicators in this modern-day rather than the old school housing and autos (copper was always key because the two biggest uses are housing and autos and this only increases due to the electric vehicle follies). Semiconductor stock charts are heading lower for the last couple weeks and NVDA is not as joyful as it was in the summer. Watch the chips and tech sector.

A lot of you tech workers and programmers that think your job will last forever and the company cannot get by without you (because the boss told you this) are in for a rude life awakening. Many of you are *ssholes and deserve what is coming at you. 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 9/28/23, Thursday Morning, at 10:32 AM EST: Claims come in this week at 204K not able to break the 200K barrier and last week is revised higher by 1K to 202K. Of course it was revised higher. The 4-wk MA drifts lower at 211K.