Nothing to see here (yet

Thursday, July 14, 2022

Our prior post today on the state budget situation noted that there is talk in the air about a recession. But the latest data on California new weekly claims for unemployment insurance suggests nothing like a recession is happening in the labor market. New claims through the week of July 9th remain at the pre-pandemic level.

As always, the latest claims data are at https://www.dol.gov/ui/data.pdf.

It might be noted that there are puzzles in available economic data. Estimates for first quarter 2022 real GDP show a drop. Although official estimates have not yet been published on the second quarter, there have been forecasts that it, too, may show a drop. New York Times columnist Paul Krugman had a piece a couple of days ago on mixed and conflicting signals from various commonly-used economic indicators:

https://www.nytimes.com/2022/07/12/opinion/employment-wages-recessioneconomy.html. From his column:

"... Some data suggest a weakening economy, maybe even on the verge of recession. Some suggest an economy still going strong. Some data suggest very tight labor markets; others, not so much..."