**Initial claims for U.S. unemployment benefits last week rose to their highest level in eight months, a sign the labor market might be losing steam as concerns over tariffs take hold of U.S. businesses and consumers. **
Unemployment claims rise to highest level in 8 months, signaling slowdown
That must be why GDPNow is currently predicting GDP growth at 3.8%
DB2
The OECD puts it at 1.6%, The Fed puts it at 1.7%, yet you pick one branch of the Fed(Atlanta) to hang your hat on. Interesting.
Pretty much explains it all.
The GDPNow estimate is for the current quarter. At the same time, I wouldn’t call real GDP growth of 1.6% “falling apart”.
By the way, the unemployment rate is 4.2% which is where it was six months ago. Not a lot of movement there.
DB2
1.6% is indeed “falling apart” because it doesn’t avoid the debt spiral. I plugged it into my handy spreadsheet to see. And this is using a rosy scenario of only $1T of deficit spending! Here’s a screenshot.
The 1.6% estimate by the OECD was for real GDP. Does your spreadsheet use real or nominal numbers?
DB2
True but Biden had a Higher GDP growth rate than Trump ever had. Yet you thought it was so bad under Biden. But if you really look at it Trump was and is a disaster. According to your own standard. GDP.
We went through this last round. And I immediately fixed the spreadsheet to use real for GDP and nominal for debt (and added a note to the previous post at the time) .
Wouldn’t the Covid-induced slowdown that coincided with the end of Trump’s presidency (and the beginning of Biden’s) discolor the usefulness of these types of comparisons?
You can find reasons to discount anything in a Presidency but by comparison you can see exactly how they did. Especially when you look at the whole presidency and average it out over the 4 years.
GDP growth was fine under the previous regime as one would expect coming out of a recession. However, as you remember there was a serious problem with inflation. (Two “I” issues played a big part in last year’s election – inflation and illegal immigration).
From 2023:
DB2
Actually GDP was great and it wasn’t a recession it was a Pandemic which, if you remember correctly, was still going on.
Which was coming down as economist said it would. Three huge printing of money, 2 under Trump and one under Biden caused that inflation.
Which Trump had a hand in, first with his huge run up in the debt with his money give aways and also with his telling the Republican party not to vote for an Immigration Bill which shows exactly why the Republicans wanted Illegal Immigrants. Notice we still do not have an Immigration bill.
Here is an interesting view of the unemployment data.
January: 4.011% Biden leaves office
February: 4.139% Trump starts Tariff war
March: 4.152%
April: 4.187%
May: 4.244%
Does anyone see a pattern here?
Yes.
And, I remember Biden’s 2022-2023 team saying that unemployment must rise to 5.5% or so… to stop inflation. And, the FED was raising the FED interest rate in order to CAUSE unemployment to rise.
The argument was that 5.5% unemployment is the economically healthy “homeostatic” (mean) point, implying two things:
The rate should regress to that “mean”; and
Deviation away from that mean is “unhealthy”.
If unemployment rises to 5.5%, will the FED drop the interest rate?
ralph
I can’t find that Ralph and either can AI. Do you have a link?
I looked for a citation for that and came up with nil. Please link. In contrast, my recollection is that the prior administration emphasized maintaining low unemployment while addressing inflation through other measures such as stimulus spending.
Pete
LOLOL.
Here’s what I found:
AI Gemini: {
The Federal Reserve (the Fed) does not have a specific numerical target for the unemployment rate. Instead, it aims for "maximum employment," which is broadly understood to be an unemployment rate near 4%. The Fed also aims for price stability, represented by a 2% inflation target.
Here’s a more detailed explanation:
Maximum Employment:
The Fed’s dual mandate includes maximizing employment and maintaining price stability. While they don’t have a precise numerical target, an unemployment rate near 4% is generally considered to be in line with their goal of maximum employment.
Price Stability:
The Fed’s other mandate is to maintain price stability, defined as the annual rate of inflation measured by the core PCE price index of 2%.
Unemployment Rate:
The actual unemployment rate fluctuates. For example, in May 2025, the unemployment rate was reported at 4.2%.
In essence, the Fed’s approach to unemployment is not about a specific number but rather about achieving a healthy labor market that can sustain itself without causing inflationary pressures. They use a variety of data and economic indicators to assess the state of the labor market and adjust their monetary policy accordingly. }
Looks like 4% is the magic number. 
However, I REMEMBER discussions about 5.5 being the target, and mean regression, etc.
Make of it what you will.
ralph
Edit. Perhaps the discussion I’m remembering was that of unemployment goes over 5.5% then the Fed will cut rates?
I rememeber Trump saying that if the Dow drops 1000 points the President should be impeached.
Or did I? LOL
Boom! They created the problem they said they wanted to solve. The arsonist is the fire department. If they really wanted a “solution” to the “immigration problem” they had that chance, and voted against it.
