Continuing claims have been on a modest upward path since last summer, but we just saw a big jump in last week’s data. The levels are still not scary high, but they definitely are consistent with a weakening labor market.

To be clear on what we are looking at, the story is one where workers are not seeing any big rise in layoffs — new claims are not very different from where they were last summer — but once people lose a job, they have a harder time finding a new one. This would be consistent with employers being more reluctant to hire, which is what we see in the JOLTS data as well.

If we do stumble into a recession, it is likely it will take this form of reduced hiring rather than a big surge in layoffs. Part of the story is that in the past, recessions were largely driven by sharp downturns in manufacturing and construction. Manufacturing is a much smaller share of employment today than in prior decades, so it is unlikely that we will see the same sort of plunge in employment. Construction could trend lower — the boom in factory construction is falling off — but barring huge interest rate hikes, it is unlikely to fall off a cliff.

This means that a Trumpcession is most likely to be a story of businesses reluctant to hire because they are worried about the impact of Trump budget cuts to education, healthcare, and other areas and also the hit from the tariffs.

I should also mention the hit to foreign tourism, an industry that Trump seems to be deliberately trying to destroy. Maybe no one told him we get $215 billion a year from it.

By the way, the folks who want to be kept up-to-date on the state of the labor market should subscribe to Guy Berger’s Substack. He can be counted on to be on top of the latest data (and he doesn’t take three days to post on the latest UI data.)

This first appeared on Dean Baker’s Beat the Press blog.

The post Trumpcession Watch: Unemployment Claims Move Higher appeared first on CounterPunch.org.