High-Freq Data and DOGE Monitor

The June bump in jobless claims is over. New and continuing claims beat the consensus, and fall back to the low levels we've gotten used to over the last couple years. 

New claims fall (and beat the consensus). But the really terrific news in the high-frequency data is this week's attainment of new all-time highs in 365 days-ahead forward earnings estimates -- a trifecta: the S&P 500 overall, the Magnificent Seven, and the S&P 493. This is the all-clear signal we've been waiting for.

New jobless claims are unchanged from last week's slightly elevated level. Continuing claims rise ever so slightly, and both miss expectations. That puts the claims-implied unemployment rate at 1.46%, a level not seen since late 2021. This incipient weakness in the labor market is contradicted by a gratifying rise in S&P 500 forward earnings. They're within a penny or two of all-time highs now -- and Mag 7 forward earnings have been making new highs already for a couple weeks. 

Misses in both new and continuing claims, taking them both back up to the ever-so-slightly elevated levels where they were a month ago -- but driving no change at all in the claims-implied unemployment rate. As Elon Musk prepares to leave Washington and return the private sector, cumulative DOGE job losses stand at only 1.7 thousand. That doesn't mean he utterly failed to clean house, although our sense is that he did. At the least, it means that fired federal government workers and hangers-on were able to find other employment. Some will be disappointed in him, but remember, the fear at the outset is that he would set off a recessionary wave of unemployment. That didn't happen.