Last week we hit "generational lows" for the weekly first-time unemployment (FTU) claims level for the month of May as well as the may continuing claims (CC) level. This column published the article "Generational Lows for May Unemployment Claims." The problem is that the rest of the world reports the seasonally adjusted (SA) data instead of the non-seasonally adjusted (NSA) data. The seasonal factors used to convert the non-seasonally adjusted data to the reported seasonally adjusted data change from week to week, month to month, season to season, year to year, and by category. This week we received more good news. The NSA FTU claims number was near historic lows for the month of May. The NSA CC value was near historic lows for the month of May. Both were ever so slightly higher than last week. How low can we really go?
Last week's First Time Unemployment Claims number Revised DOWN to 206,973 - this week it "climbed" to 209,814. Normally we hit the lowest level of NSA FTU claims during September. Last September and the prior September we broke below 200.000 NSA FTU Claims. While others were focusing on the fictitious SA FTU claims streak they were ignoring reality. The lowest May levels of NSA FTU claims were during the Spring Job Markets of 1969, 1970, and 1971. It used to be "Breaking News" when the SA FTU number dropped below 300,000 - now it is being reported at 234,000 and we hear nothing. This number will fall during the Summer - will it take a number of 135,000 by the end of the month to garner any interest from this press?If we hit 195,000 NSA next week it would be reported at 211,000 SA FTU. The NSA FTU level would have to drop to 184,000 next week for the rest of the world to report a value under 200,000 SA FTU.
Last Week's NSA Continuing Claims Level was revised higher to 1.785 Million - This Week it is 1.786 Million. The current values for continuing claims are at levels we normally see during the first week of October. The lowest May NSA CC value was 2.077 million for the second week of May 1971. We have 1,786,443 for the second week of May 2017. Could we drop to 1.639 million and tie the level recorded for the third week of May which was set during 1970? Will anybody report this data? How low can we go by October of this year? Can we get to 1.6 million? 1.5 million?
Weekly unemployment claims data is the most current economic data we receive during any week or month of the year. The jobs numbers are released two to three weeks after the data is recorded. The JOLTS data is a good six weeks behind the times. Gross Domestic Product is for the prior quarter. We are receiving "Final" data from the month three months prior, the preliminary data for two months prior, and the advance data for the most current data. Then we receive the preliminary GDP data the following month and the Final GDP number two months later. By the time the data tells us that we are in a strong growth period or in the beginning of a recession it has become the "worst kept secret." We will be receiving the "preliminary" first quarter GDP data (second estimate) tomorrow. The point is that if people are losing jobs, or if fewer people are collecting unemployment benefits, we will find out via the weekly claims report before we receive that data in the Monthly Jobs Report.
What to Watch: Real U-3 Unemployment. This week the continuing claims data is the data collected closest to the Current Population Survey (CPS) data collection date for the monthly Employment Situation Report. Last Month the NSA CC value closest to the CPS survey date was 2.014 million on April 15, 2017. We had 6.555 million U-3 unemployed. If we have the same ratio of people continuing tp collect claims to official unemployed then the NSA U-3 number could drop to 5.8 million. It is slightly misleading to use one survey's data, compare it to another's surevy data, and create a ration to project a number. Margin of error and sample size make a difference. The point is: Unemployment is falling and should continue to fall through October as people take on Summer jobs. Will it be reported?
Unemployment claims are the lowest for the month of May since 1971. Nobody seems to care. Are we already "tired of winning?"
It's the economy.