Jack Dunn - Reclaiming Common Sense

 The weekly unemployment claims report has been virtually ignored during the past year. The first-time unemployment (FTU) claims record for seasonally adjusted (SA) data has been forgotten, even though it is still in effect - if you believe seasonally adjusted data.  The NSA Continuing Claims (CC) level is slowing heading to the 2 million claim level. What should be good news is "no news."

First Time Claims Remain at Eighteen Year Lows for this week of year. Forget the seasonally adjusted data, the unadjusted FTU claims number is the lowest it has been since 2000. The NSA FTU may drop below 200,000 during the next few weeks as hiring accelerates. The reason why the NSA FTU level is at "historic" lows varies - 2 million NSA Private Sector jobs were created, full-time and part-time - during the February and March Jobs report periods. We have also seen elevated levels of people working multiple jobs during February and March. People working part-time jobs do not earn unemployment benefits. People who are working multiple jobs who lose one job are still employed, just to a lesser level. There is no Lesser employment insurance - other than the back-up job(s.)

The First-time Claims Level could have been reported as high as 246,000 - Still good. The NSA FTU data is what is recorded. The SA FTU is what is reported. It could have been reported marginally lower - as low as 224,000. The "magic number" has been 300,000 SA FTU claims. This is why there is a collective yawn when this report has been released.

Continuing Claims are at their lowest Level of this week of April since 2000, too. First-time claims beget Continuing Claims. This time of year we tend to see unemployment rate/level drop and the participation rate rise.While there is no direct correlation between the continuing claims level and the unemployment rate, the dropping in the level of CC should mean that unemployment measured by  the Current Population Survey data set should drop. The NSA CC level is a quarter million people lower than what it was during the CPS data period. The covered insured level is lower. Unemployment tends to drop during April, as was spelled out in the April Jobs Report Forecast  column. Expect the slide in continuing claims to continue for "the rest of the Summer."

This report is the most responsive report we receive during the course of a month. The GDP data is one, two, or three months out of date due to its quarterly nature. The Jobs Report tells us where we were two to four weeks ag0. The seasonally adjusted FTU streak doesn't exist - it really never did exist. The data is good. It may be good for the wrong reasons.

It's the economy.