Jack Dunn - Reclaiming Common Sense

Hurricane Irma and Hurricane Harvey Impacted the Claims Report                   and Both Levels Dropped?


Last week we had a spike in first-time unemployment claims "due to Hurricane Harvey" in Texas. This week it was thought that we would see a continuing claims bump, possibly more firs-time claims as the business owners determine that they need to shut-down for an extended period of time, and no impact from Hurricane Irma for two weeks because the Hurricane hit this past weekend and the claims period ended September 9th - the day before the hurricane hit. We saw a drop in first-time claims, a drop in continuing claims, and "Impact from Irma" reported.


First-time Unemployment Claims Dropped from Last Week's Level. We had been skirting above and below 200,000 non-seasonally adjusted (NSA) first-time Unemployment (FTU) claims for weeks. Last week the NSA FTU jumped from 196,000 to 250,000 claims. This meant that he seasonally adjusted (SA) FTU claims number was reported as jumping from 236,000 to 298,000 claims. The authors of the weekly claims report are saying that the claims numbers are being impacted by both Hurricane Harvey and Hurricane Irma. So, the unemployment claims are dropping as contractors are finding work for clean-up and restoration? Is that what they are saying?


First-time Claims tend to bottom during the second week of September. We had slightly fewer FTU claims recorded during the second week of September during 2015 and 2016 (199,000 and 193,000 versus 214,000.) The story that isn't being told is that we have more people eligible for benefits than during any other year during the second week of September. We have slightly more NSA FTU claims this September than we had during the second week of September 1987 and the second week of September 1999. We have fewer first-time claims than we had during 1974.


What is the True First-time Claims Number that Should Be Being Reported? We had lower NSA FTU Claims during the same week of 1967, 1968, and 1969, as well as 2015 and 2016. They also had different seasonal factors than we had this year. If we used the same seasonal factors to convert this week's NSA FT we could have a claims level as low as 253,000 or as high as 315,000. It is unlikely that the NSA FTU level will drop next week when the real impacts of Hurricane Irma are reported.


How did the Non-Seasonally adjusted claims number drop for the first week of September? The continuing claims data lags the FTU data by one week. It was thought that the FTU data bump last week would be reflected in a slight uptick this week. The Continuing Claims (CC) data tends to drop through the first week of October. It appears that the seasonal downward momentum was greater than the upward force of first-time claims. The NSA CC data for the final week of August was revised up from 1.802 million to 1.812 million. The first week of September recorded 1.707 million CC recorded and 1.944 million CC reported for the current week.


How low can the Continuing Claims data drop? We have 1.707 million continuing claims right now. This is lower than where we were during the first week of 1969 and the first week of 1970. Could we drop to the levels seen during 1988? We will see a spike in Irma related first-time claims next week. Some of these people will "become" continuing claims, eventually - just not this week.


Why is "nobody" discussing the Disaster Unemployment Program? The federal government has a program specifically designed for people who are in a Presidentially declared emergency area. the "Disaster Unemployment Program" helps those that fall into the following categories:

  • No longer has a job.
  • Is unable to reach their place of work.
  • Cannot work due to damage to the place of work.
  • Becomes the head of the household and is seeking work because former head of household died as a result of the disaster.
  • Cannot work because of a disaster-incurred injury.
  • Must not otherwise qualify for "regular" unemployment benefits.

This program covers the self-employed as well as the other workers not covered by the regular benefits program. Please follow the link above to the DUP site, otherwise you can call 1-877-872-5627 for information on availability within your region. You must apply within 30 days of the program becoming available.


We will not see the impacts of Irma on the September Jobs Report. The data collection ended on September 12th. The storm hit on the 10th. We should see some impact on the employment situation report for September, as that storm hit after the 12th of August. The trends right now are that the Continuing Claims level should continue to drop. This does not necessarily mean that we will see the office NSA U-3 unemployment number drop during the month of September. The NSA CC number measures those who are receiving benefits - the NSA U-3 measures those who say that they are unemployed and looking for work.


It's the economy.