“I’m not superstitious, but I am a little stituous.” – Michael Scott, The Office (comedy)
Forecasting in the post-COVID era has been challenging, as we have chronicled on many occasions. The extreme changes in economic conditions paired with the rapid pace with which they have occurred is only rivaled by modern tariff policy. Traditional forecasting tools have not been able to keep pace. Nevertheless, we continue to search for clues.
Last week, the Commerce Department confirmed the US economy contracted in the first quarter, albeit at a slower -0.2% pace than suggested by the initial estimate reported last month. The Labor Department also published its latest Employment Report last week which showed the number of workers claiming unemployment benefits rose to 1.919 million individuals. This is notable for two reasons. First, it is an upside breakout from a tight range held for the past six months. Second, it is the highest level since the pandemic (November 2001).
Although the rise is no reason to panic, it does seem to confirm our view that the one-dimensional economy, driven only by consumer spending, may be stalling. Of that, we are not certain, but we are a little stituous.
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