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Initial jobless claims showed a 12K increase this week to 346K, bringing the four-week moving average up to 343K. Many economists watch the four week average as a leading indicator for economic weakness, and today's rise has some saying that a recession is becoming increasingly more likely.

Below we highlight the four-week moving average of initial jobless claims since 1967, with periods when the economy was in recession highlighted in red. We also note where the indicator was when the recession started. As shown in the chart, the current level of initial jobless claims remains below the levels it was at when the last four recessions began. While things could certainly get worse over the next several weeks, current levels of initial jobless claims are still not quite in 'recession' territory.

click to enlarge

Source: Jobless Claims Not in Recession Territory Yet