– by a New Deal Democrat
Initial claims for jobless benefits rose by 17,000 this week to 240,000, the highest level in 3 months. The 4-week average also rose 5,500 to 226,750. Continuing claims a week ago rose 48,000 to 1,551,000, the highest number since March:
While a week like this shouldn’t be cause for alarm, initial claims are one of the increasingly few positive short leading indicators. It has been more neutral of late, but it will only take about another 25,000 increase in the 4-week average to over 250,000 to go fully negative, in line with the “recession warning” I’ve written about several times this past week.
At this point, all 3 of my primary indicator systems – the long and short leading indicators tracked by the Conference Board and ECRI (pace Prof. Jeffrey Moore), the high-frequency weekly indicators, and the “consumer forecast” – are all signaling an impending recession.
On the other hand, new orders by manufacturers rose 1.0% in October and “core” capital goods rose 0.7%. It is one of two components in the Conference Board’s Leading Indicators Index that is still positive.
Additionally, new home sales will be released later this morning. I’ll update this post with a line or two later.