Reclaiming Common Sense

 Thursday is Unemployment Claims Data Day. The data that used to receive headlines barely garners crawler status. It appears the media is bored with winning as it relates to the unemployment claims data. The data that is reported is the seasonally adjusted (SA) first-time unemployment (FTU) claims data and the SA Continuing Claims (CC) data. The data that is recorded is the non-seasonally adjusted (NSA) FTU and CC data. The seasonal factors used to convert the NSA data to the SA data change week to week, month to month, seasonal to season, year to year, and category to category. When seasonally adjusted data is compared to different seasons with differing seasonal factors FACTs (False Assertions Considered to be True) are created.

What happened this week?

Down is Up - First-time Claims Record a Drop - Report an Increase. First-time Claims dropped to 228,461 after last week's data was revised up to 234,185. Last week's advance value was 233,579. This is the lowest it has been for this time of year since 2000. It is still near historic lows and is comparable to what we saw during the 1970s when we had tens of millions fewer people eligible for claim benefits. The SA value increased from 238,00 to 241,000 and received no mention on the business channel I watch while working on my columns.

Continuing Claims Creeping Slightly Higher - Still under 1.8 million. The data for last week was revised from 1,784,453 to 1,785,151. This is a historic level of continuing claims, as was reported last week and during prior weeks.

This data has very little impact on the official unemployment number. The U-3 level measures those who are out of work who are seeking work. The weekly claims data is people who have lost work and are receiving benefits. If we follow the seasonal trends the NSA FTU number should fall below 200,000 the final week of July. This has happened recently, just not during July. The continuing claims data is "fed" by the first-time claims data. The annual trend is for claims to increase during the Summer. We should remain below 2 million claims through the end of July.  This data is good news. It doesn't bleed so it doesn't lead.

It's the economy.