Watching Recession Indicators

Published 28/11/2019, 12:25

Just like the yield curve, initial jobless claims have a pretty solid track record in signalling US recessions. In recent weeks, first-time claims for unemployment benefit started rising gradually to levels that could make you wonder whether we’ve seen the low point in unemployment.

Last week, however, initial jobless claims fell from 228K to 213K, and also lower than expected. At this point in time, it’s difficult to say that they are on an upward path, which could lead into a recession.

Yet it is something to keep a close eye on, especially since consensus has a relatively upbeat view on consumer spending, reducing the odds of a downturn. But slower payroll gains and a shorter work week suggest consumer spending could be less robust than the latest numbers suggest.

US Initial Jobless Claims Vs Recession

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