For more than a month now, jobless claims have been surging higher. Which leads us to an important question — is this just a temporary “bubble” in unemployment due to things like DOGE cuts? Or is this a larger trend shift that could point to a slowdown in the economy? I’ll share my take in today’s video update, then Matt Clark will help you flesh out the bigger picture below:
Read MoreHello, it’s Matt Clark here. Another short week is upon us as the Fourth of July holiday begins on Friday. It means another long weekend for markets as all major exchanges will close at 1 p.m. on Thursday and remain closed until Monday morning. Additionally, Andrew is currently at West Point, taking his son Ari to his first year at the United States Military Academy. We certainly wish Ari all the best as he embarks on this new journey, and Andrew will return next Tuesday.
Read MoreEver since DOGE laid off thousands of workers earlier this year, Wall Street has been waiting for unemployment claims to start ticking up. But as I’ve explained time and time again, the vast majority of these employees were given severance packages — effectively extending their employment out another 90 days, through the end of May. Well, May is over. And as of last week, we’ve finally started to see layoffs tick up.
Read MoreWelcome to another Thursday edition of Superforecast Trader. Well, as I predicted, the run-up to the Memorial Day holiday pushed weekly jobless claims up this week. After three consecutive prints near the 220,000 to 230,000, claims jumped 14,000 to 240,000 last week.
Read MoreThere’s an interesting rule of thumb in labor markets — that jobless claims tend to jump during weeks that follow a three-day holiday weekend (like Memorial Day).
So for this week’s video, I wanted to share an explanation on why that happens … and why the consensus is still underestimating this week’s coming spike in claims.
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