Reclaiming Common Sense

Turn Left and you Should Be in Toledo

There is a classic episode of M*A*S*H where Trapper John is in the middle of a minefield and Radar is giving him directions from a map to negotiate the minefield to rescue a local child. At the end of his journey Radar says something like "Go left 5 feet and you should be in Toledo." How do you know where you are, where you have been, or where you are heading if you are looking at the wrong map?

The weekly unemployment claims report used to be a mainstay of bottom of the hour news at 8:30 AM EST/EDT. The numbers reported are the seasonally adjusted (SA) First-time Unemployment claims (FTU) number and sometimes the SA Continuing Claims (CC) Number.  The problem is that the seasonal factors used to convert the recorded non-seasonally adjusted (NSA) FTU and CC data to the SA FTU and SA CC data change week to week, month to month, season to season, and year to year. When the authors of the report compare seasonally adjusted data from different seasons, and different decades, they are being disingenuous. You have to compare NSA data from the same week or month of the year to avoid the fallacy of seasonal adjustments. When these factors are manipulated FACTs (False Assertions Considered to be True) are created - such as the "Under 300,000 SA FTU Claims Streak - by the way, that is still continuing to this day. The streak was ignored today - the report was ignored today.

The Lowest NSA First-time Unemployment Claims Number Since May 2000. We saw last week's 215,041 NSA FTU claims level revised up to 215,224. Shocker. Nobody is reporting this. This is unemployment claims limbo. How low can we go? We should see stability through June, see a spike during July, and a slide through the second week of September.

We are Seeing September Levels of Unemployment Claims during May. WE have fewer NSA FTU Claims than we had during the first week of June... 1972. First Time claims spike during January. Can we hit under 150,000 claims by September? Will it be reported?

Lowest May Continuing Claims Level Since May 2000. This week we have 1.784 million continuing claims. Under 2 million was good - Crickets. Under 1.9 million was better - Crickets. Now we are under 1.8 million NSA CC - Crickets. The continuing claims level is so low because we have added 2.75 million NSA Current Population Survey Jobs during the past three months. We have elevated levels of multiple job workers. We have elevated levels of part-time workers. This all impacts the FTU number and that impacts the CC number.

Fewer Continuing Claims than May 29, 1971. We saw a record 6.5 million continuing claims during March of 2009. We now have under 1.8 million.  Part of the difference is the difference in the participation rate between March 2009 and April 2017. Part of the difference is the number of people being hired.

The Press will not be able to ignore good news too much longer. Jobs are surging, unemployment is falling, participation is stabilizing and improving. The continuing claims data we receive next week will give us an indication of where the unemployment rate may be next month, as reported in the Employment Situation Report.  Last month the mid-April Continuing Claims level was 2.14 million - the NSA U-3 Unemployment level was 6.555 million. We have already shed 360,000 continuing claims since that time. Could we see a May Unemployment level below 6.0 Million?  How much of a spike in employment will we see? Another million new NSA CPS jobs?

It's the economy.