Welcome Back to the 1970s
The Unemployment Benefits program is 50 years old this year. Unemployment claims tend to peak during January and trough during September. We have had eight consecutive years of declining peaks and declining lows. This has not happened during the past fifty years. The first-time claims data leads the continuing claims data by one week. The headline data, when there is a headline, is the seasonally adjusted (SA) first-time unemployment (FTU) claims number. There is also a Seasonally Adjusted Continuing Claims (CC) value. The seasonal factors used to covert the recorded non-seasonally adjusted (NSA) data to the reported SA data change between category, week, month, season, and year. Comparing data from different seasons with different seasonal factors is disingenuous. When it is done FACTs (False Assertions Considered to be True) are created. We have more people covered by unemployment benefits than we have ever had.
First-time Claims increased - Still near Historic lows for this time of year. Last week's 204,788 claims were revised higher to 205,537. This week they popped up to 229,288. What has to be remembered is that a seasonally adjusted level under 300,000 claims has been considered "healthy." last week's SA FTU value was 223,000. This week's SA FTU is 233,000. Or is it?
The Seasonal Factors released earlier this year say that the value should have been 234,000. What's one thousand claims among friends. The number could have been reported at 239,725 if we used last year's factor. It could have been reported as high as 275,000 if we used the seasonal factors from the 1969 or 1971. That is Fantasyland. Reality is that we have fewer claims than we had during the same week of 1970, 1971, 2000-2016. We had over 80 million fewer potential claimants during the 1970-1971 time-frame.
Continuing Claims ticked up to 1.597 million claims, non-seasonally adjusted. This level is lower than we saw during the lowest week of 1999. This is comparable to the lowest week of 1988. One again the peak year to year has been lower every year since 2009. The low has been lower every Fall since 2009. Last week's data was revised up from 1,559,307 to 1,559,746 This week it was recorded at 1,597,654 and reported at 1.893 million. This data gets less than crickets in the media. The silence is deafening.
The Continuing Claims is Lower than it was during the Second Week of October 1970 and 1971 - and almost every week since that time. Yes, the data could have been reported higher that it was. It could have been reported lower that it was reported. This is the mystery of SA data. Do we have another three weeks of declining claims possible, as we saw during November of 1988? Could the NSA CC drop below 1.5 million? Could the mainstream media start talking about this data? We were doing worse than ever during March of 2009 than ever recorded. We have seen year to year declines for peaks and valleys since that time. We are doing better than we were during the Clinton Years. It is important to note that participation is much lower now than it was during the 1990s. It is also important to note that the participation rate is improving.
It is interesting to note that this week we saw unemployment claims, first-time, spike in Puerto Rico of less than 2000 claims. There is no data in the report for the continuing claims at the state level. We may see a delayed spike in claims in Puerto Rico as power is restored. Next week We will receive the Jobs Report. Continuing claims are lower by 25,000 than they were mid-September. This may translate to a drop in the NSA U3 unemployment number by 100,000 people. We are still seeing continued improvement in the data. Tomorrow's GDP number should be strong. We received great new home sales data. We saw great durable goods orders. We have had a great quarter for total retail sales. The headline GDP number, the annualized rate for the third quarter could reach 4%. The Real GDP could hit 2.6-2.8%. The stock market continues to rise on good news.
It's the economy.