As explained in an earlier post, I am sceptical of US recession forecasts. One indicator I am monitoring closely is weekly initial claims for unemployment benefit. Claims always rise sharply at the onset of recessions – see chart. Indeed they usually start moving ahead of cyclical turning points, which is why they are included as a component of the Conference Board’s index of leading indicators.

Claims rose a bit during August but have since fallen back, with the latest figure the lowest since May. A five-week moving average is essentially unchanged from a year ago. Further evidence of labour market resilience comes from daily data on withheld income and employment taxes. Receipts per day so far in September are 7.7% up on a year ago – slightly above the 6.8% average increase over January-August.

So far so good.