One of the former must see numbers during the past eight years has been the Seasonally Adjusted (SA) First-time Unemployment Claims (FTU) number. Is it over 300,000? Is it Under 300,000? Another number is the Continuing Claims (CC) Number. The seasonal factors used to convert the non-seasonally adjusted (NSA) data to the SA data change by category and from week to week, month to month, season to season, and year to year. There are some people who believe that it is good that we have under 300,000 SA FTU claims. Normally it would be.
The media is comparing this month's November unemployment rate of 4.43% to the unemployment rate of 4.49% . The problem is that the participation rate was 66.13% during November of 2007. Currently the participation rate is 62.14%. That difference in the participation rate is a difference of 8.833 million participants. The November employment situation report indicated that there were 7.066 million unemployed workers. If these non-participants are added to the unemployed we would have 15.899 million unemployed workers and the unemployment rate would be 9.45%
So what happened this week with the unemployment claims report?
We Saw 305,000 NSA First-time Unemployment Claims this past week. This is much different from the official SA FTU number of 254,000. This is a drop from last week's SA of 258,000 and NSA of 352,534. We see a large variability in the NSA FTU claims week to week during the final weeks of the year.
Should it have been reported as 276,000 First-time Claims? The hyperlink in the headline on this column will take you to the column that reported the most recent end to the "Under 300k Streak." This is a streak that never really started. The seasonal factors used last year would have produced a result of 276,500 SA FTU claims. The factor from 2007 would have yielded a number of 240,000.
The NSA Continuing Claims number dropped below 2 million, Again. This number should be a good number. Once again, it is being distorted by a low participation rate. If people do not qualify for first-time claims they can't receive continuing claims. The Continuing Claims number will also continue to rise through the end of the year.
We do not have a streak of 90-plus weeks of sub-300,000 SA FTU claims. We cannot compare this data with data from prior years. The media does not cover this report because they do not believe it. If you received unemployment claims recently, you are not alone. If you do not qualify for unemployment, you are not alone. If you are not "participating" in this recovery, you are not alone.
It's the economy.
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