Jack Dunn - Reclaiming Common Sense

The weekly unemployment claims report was released. The non-seasonally adjusted (NSA) First-time Claims (FTU) number rose. The NSA Continuing Claims (CC) data rose. The NSA Covered Insured Unemployment rate rose. The response has been a collective yawn. The data is rising, and that is okay because it tends to creep during this time of year. The  problem is in the seasonal factors used to convert the NSA data to the Seasonally Adjusted (SA) data. The seasonal factors used to covert the NSA data to the reported SA data change from week to week, month to month, season to season, and year to year, as well as between categories.. We SA data from different seasons are compared False Assertions Considered to be True (FACTs) are created.The biggest FACT is the Private Sector Jobs Creation streak. A second FACT is the U-3 Unemployment rate under 5%. A third FACT, that is no longer being promoted, is the consecutive weeks of SA FTU claims under 300,000 claims.


What happened this week?


First-time Claims increased to 239,222 - reported at 242,000. Last week's NSA FTU number was revised down to 212,829  and reported at 223,000. This is still the lowest for the this time of year since 2000. This is lower than last year and quite remarkable, even though few other resources are spending any time discussing the topic. The annual trend is to stay fairly level between now and the end of April. Expect numbers around 235,000 to 265,000 .


One of the Lowest Seasonally Adjusted FTU Numbers for the First Week of March. If we used the seasonal factor used last March the SA FTU would have been reported at 258,000 - significantly lower than the "healthy" level of 300,000 claims. The SA FTU is the lowest it could have been, based on the seasonal factors used since 2000.


Continuing Claims Continue to Remain under 2.5 Million People.  The NSA CC number for last week was revised down to 2,392,472. The SA CC number continues to be reported at roughly 2.06 million. The NSA CC value is at a 17 year low. The first-time claims are at a 17 year low. We need to have FTU claims before we have continuing claims. We have had elevated levels of part-time workers and elevated levels of people working multiple jobs who are not eligible for unemployment benefits if they lose a part-time job or one of their multiple jobs, even if the job they lose is a full-time job and they maintain their part-time job.


Tomorrow's jobs report should reflect a lower unemployment level and a higher participation rate. Come back tomorrow after the number crunching is done.


It's the economy.