Reclaiming Common Sense

The weekly unemployment claims report used to be headline news at the bottom of the hour. It has now been relegated to the "bottom of the birdcage." That is unfortunate. This year we set a record for the number of weeks with the first time unemployment (FTU) claims, non-seasonally adjusted (NSA,) under 200,000 claims. We recorded 21 weeks this year where the NSA FTU was under 200,000 claims. This year we set a record low Insured Unemployment Rate, non-seasonally adjusted, at 0.95% during the week of October 26th.  This means that less than 1% of the "covered insured workforce" was receiving continuing unemployment claims (CC.) The NSA CC dropped to its lowest level since 1973 the week of October 6th the same week when we set the IUR record low rate, when it was originally reported at 1.349 million claims  on October 13th. The trend has been for lower lowers and lower highs for both the NSA FTU value and the NSA CC value. The NSA CC value has been at least 200,0000 lower than the same week data for the prior year for many weeks. If we remain 200,000 claims fewer than last year when we hit the first week of January this year, then we could challenge the NSA CC value for January 6, 1973 when it was 2.121 million claims. There were only 54.333 million covered insured that week of the year. This year we have 142.513 million covered insured. That is the background for this week's report. What was recorded, NSA, and what was reported, seasonally adjusted (SA) this week?

Continuing Claims jumped, as it normally does, the final week of November. We normally see jumps of 18% to 23% in the continuing claims this week of the year. This year we saw a surge of only 15.47%. The Continuing claims level is 298,000 claims fewer than the same week last year.

The Seasonally Adjusted Continuing Claims Data could have been reported lower than it was reported. The SA CC was 1.631 million claims. It could have been reported as low as 1.591 million claims. It could have also been reported at 1.88 million claims. This is the randomness of the seasonal factors in its full glory.

The Insured Unemployment Rate remains historically low for this time of year. Last year we had an IUR of 1.4%. This week the official rate was 1.2%. The rate was actually 1.16%.

First-time Unemployment Claims Spiked this week - as they do the first week of December. First, this is the lowest first-time unemployment claims for this week of December since 1974. The NSA FTU claims data was 637,000 claims during December 7, 1974.This week the NSA FTU value was half that at 315,852 claims. Do not worry, the under 300,000 SA FTU Claims streak is still continuing. The SA FTU was reported at 231,000 claims, well below 300,000. A number around 400,000 claims is typical this time of year.

The Seasonally Adjusted data could have been reported lower than it was reported. The jump of 97,000 NSA FTU claims was reported as a drop of 4,000 claims. That, said, the  SA FTU could have been reported as low as 226,000 and as high as 270,000.

The continuing claims data is related to the non-seasonally adjusted U-3 unemployment claims like a brother or a cousin. The Job Openings data is related to the unemployment data as a sister or a niece. Related and different.  We saw historically low continuing claims data for the month of November during the second week of November, the week closest to the Current Population Survey (CPS) data collection date for this month's Jobs Report.  Will that be reflected in the official U-3 unemployment data. We had a near record level of people working two jobs during October. A second job is the ultimate form of unemployment insurance. How will this impact the data tomorrow?Stay Tuned.

It's the economy.