The article "Economic Urban Legends" discussed some of the less than accurate beliefs that continue to percolate in the news. One of the Urban Legends pertains to the Weekly Unemployment Claims Streak that was proposed under President Obama. The streak did not begin when they think it did. The streak has ended many times. The problem is that they were comparing seasonally adjusted data where the seasonal factors change from week to week, month to month to month, season to season, and year to year. This column wrote a series of articles showing how the slight differences in the seasonal factors for the same week of the year kept the streak alive when it should have ended.The current streak started during November of 2016.
Non-Seasonally Adjusted (NSA) First-time Unemployment (FTU) claims tend to spike to the highest level of the year during the first week of January. Non-seasonally adjusted Continuing Claims (CC) also tend to increase substantially during the first week of the year. Both trends are visible in their respective time-series graphs. So what happened this week. The question is how will the seasonal factors covert the NSA data to the reported seasonally adjusted (SA) data? Another question is will the authors of the report start publishing the seasonal factors for the rest of the year as they used to do? Another question: Will they produce an index of all the prior reports, as they used to produce?
Non-Seasonally Adjusted First-time Unemployment Claims Recorded a Jump and Reported a Value still under 300,000 Claims. The NSA FTU value is the lowest for the first week of January Since 1970. The 1973 value was 412,000 when there were fewer than 56 million covered insured. We now have over 140 million covered insured. The value for covered insured was collected starting during 1971 when there were 53 million covered insured. This matters because we have fewer people making claims with 84,000 million more people eligible.
How do we have fewer First-time Claims record for the first week of January than during 2017 and report more continuing claims? It comes down to the seasonal FACTors. That isn't a typo. A FACT is a False Assertion Considered to be True. Seasonal factors skewed the SA Current Employment Statistics Private Sector worker number low for December. Seasonal FACTors are skewing high the SA FTU data. What is different between this January and Last January? Think about it.
The Continuing Claims Data recorded a Jump and Reported a drop. The NSA CC value was reported at 2,294,563. This is up from last week's 2,063,721. The SA value went from 1.902 million down to 1.867 million. Up is down. This is the power of the seasonal factor. There was a slight uptick in the NSA FTU claims data for the first week of January that should be reflected in a slight upward bump in the continuing claims data that is reported next week. Last year the NSA CC value was recorded just over 2.5 Million. We "are not going to see a spike of 200,000 claims" next week. The 351,000 spike in NSA FTU claims converted to a bump of 231,000 this week. We might see a spike next week close to the 2.518 million level, just as the NSA FTU level was close to the the NSA FTU level of 2017. The trend is lower.
The Continuing Claims data is the lowest since 1988 - Lower than 1970, 1971. How low could the data have been reported? It could have been reported at 1.805 million claimants. There are 170,000 fewer NSA CC claims as of 12/30/2017 compared to 2.518 million 1/1/2017. Will two days make a difference? Could we see a number between 2.34 million continuing claims and 2.51 claims next week? Most likely. It is going to come down to the seasonal factors used.
Where are the Seasonal Factors? Where are the prior reports? The Department of Labor used to publish the data back to 1967, the original date of the unemployment program. The Department used to publish the data at https://www.ows.doleta.gov/unemploy/data.asp They no longer do so. The Department of Labor used to publish and Index of prior reports at https://ows.doleta.gov/press/ They no longer do so. I have attempted to find the seasonal factors for this year. Nothing. I have attempted to find the prior reports. Nothing. What are they hiding? How can you know where you are if you do not have a map? How can you track how they are fudging the data is you can't see where the seasonal factors are heading?
The Weekly Unemployment Claims data used to be headline news at the bottom of the 8:00 hour most Thursdays through the first term of the Obama Presidency. The interest in the data faded as the President touted his "Streak" week after week. This column and its sister site published numerous articles regarding how disingenuous it was to compare data from January and July or January and April. The seasonal factors change. The real non-seasonally adjusted data is where the citizens of the United States live. The data from mid-December was just under 2 million for the continuing claims data. The NSA CC data will be higher than that during the January 12th collection date week for the Jobs Report. Unemployed workers are participants. The workforce will shed jobs and workers as it has done "every" January. This data will be seasonally adjusted. We should see more SA CES workers added to the economy. This data should continue to roll through July. The Weekly Claims data should continue to be at year over year lows as non-participants start participating again.
It's the economy.