Favorite Recession Indicator shows next recession keeps moving further out

By Wolf Richter for WOLF STREET

This is kind of funny. Initial claims for unemployment insurance fell by 8,000 to 215,000 in the current reporting week, after having fallen by 9,000 in the prior week, according to data the Labor Department this morning.

What’s funny is the headline treatment that the jump two weeks ago (May 9) to 232,000 had received: It was hyped as a sign that the labor market is suddenly weakening, and that the Fed would start cutting rates soon (which we obviously pooh-poohed at the time).

So today, initial unemployment claims were back to the historically low levels that had prevailed for much of the past two years, another sign that the labor market is relatively tight. We take this seriously because the data are an ingredient in our Favorite Recession Indicator (more in a moment)