US jobless claims came out today better than expected. Since one data point does not make a trend, here is a chart of the popular 4-week moving average of initial jobless claims going back nearly five decades with recessions highlighted in red. As you can see, jobless claims have trended higher before every single recession. Currently they are still trending downwards, which means less people are filing for unemployment benefits and odds for a near-term recession remain low.
Including jobless claims, the Conference Board tracks ten leading economic indicators (LEIs) for the US that "signal peaks and troughs in the business cycle" (source). To see just how useful the Conference Board's LEI has been for market participants assessing economic and market risks, notice that it has reliably forewarned every single US recession for the past 50 years. Currently, it shows that leading economic indicators for the US have moderated but are still positive and well above the point of contracting, which typically happens before the onset of recession and major bear market.
Source: Bloomberg
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