The Only Claims that Matter

• U.S. recession frequency has dropped dramatically from 21% of the time (1970-1990) to just 1.5% since the Global Financial Crisis
• Initial jobless claims typically bottom about 21 months before a recession; claims currently bottomed 46 months ago with no sustained upward trend indicating recession risk
• Year-over-year increases in jobless claims above 20% have always coincided with recessions since 1985, but current claims remain below prior-year levels

Summary

Key Argument: Despite recurring recession fears in headlines, actual U.S. economic data suggests the economy remains resilient, with initial jobless claims serving as the most reliable recession indicator.

Main Data Points

• The U.S. has experienced only 3 months of recession in the past 17 years, despite five consecutive years of heightened recession fears
• Recession frequency has declined from 21% of the time (1970-1990) to just 1.5% post-Global Financial Crisis
• Initial jobless claims historically bottom approximately 21 months before a recession
• Claims currently bottomed 46 months ago (coinciding with the Fed's 2022 rate hiking cycle)
• Year-over-year claims remain below prior year levels; historically, increases above 20% signal recession
• The S&P 500 experienced a 25% drawdown in 2022

Market Implications

The article, authored by Potomac Fund Management's Shawn Snyder, emphasizes data-driven risk management over reacting to media narratives. The current "low-hire, low-fire" environment is expected to persist if corporate profitability holds. Mass layoffs rarely occur without deteriorating corporate profits first.

Additional Notes

• WTI crude fell from $94.41 to $90.83 per barrel
• Brent crude held steady at $94.59
• One-year inflation expectations dropped from 5.0% to 3.5% following March CPI data
• Polymarket shows 67% probability of permanent ceasefire by June 2026 (regarding Strait of Hormuz tensions)

Conclusion: While another recession is inevitable, current jobless claims data suggests no immediate downturn, making headline-driven fears largely unwarranted noise.