Reclaiming Common Sense

The Mainstream Media Used to Cover the Weekly Unemployment Claims Report

I guess that there has been too much winning.

It used to be good when we had a seasonally adjusted (SA) FTU under 300,000 claims.  This week we recorded our eighteenth week with the non-seasonally adjusted (NSA) first-time unemployment claims (FTU) level under 200,000 claims. This has only happened during 1967 and 2018.We also saw the NSA Continuing Claims (CC) level drop to 1.461 Million claims and the Covered Insured Unemployment Rate (IUR) drop to 1.01%. The only time that the IUR has been recorded lower was during October of 2017. What was recorded and what was reported this week?

Normally we hit our lowest level of NSA First-time Unemployment Claims during either the first or second week of September. Last week the NSA FTU was recorded at 159,000. It is difficult to drop much lower than that when there are 144,199,701 covered insured, the most ever. Last week's (9/7/2019) level of 160,324, revised, was below the 2018 low level of 162,640 (9/8/2018.) The difference of one day is the difference of one week in recording time.

This was the eighteenth time this year that the NSA FTU claims level was recorded under 200,000 claims. We had zero weeks during the time from 1974 through 2014. We had one week during 2015 when the NSA FTU was under 200,000. We had two weeks during 2016, four weeks during 2017, 13 weeks during 1973, 19 weeks during 1967, and 21 weeks during 2018. Last year every week of August,  September, and October recorded fewer than 200,000 NSA FTU claims. We have been under 200,000 every week of August and September, so far. Last year we had 14 weeks at this time of the year.

The Seasonally Adjusted FTU level was reported at 208,000 claims. It used to be headline news when the SA FTU value was under 300,000 claims. We had back to back weeks earlier this year when the SA FTU were under 200,000. This week the SA FTU could have been reported as low as 203,000 or as high as 250,000. It is important to recognize that some in the media will comment that the SA FTU is not better than it was last year - the thing is that we have 2 million more covered insured than we had last year at this time. Two million more workers with no more seasonally adjusted first-time unemployment claims. The seasonally adjusted first-time claims level has been under 300,000 since March 7, 2015. When the revisions to the FTU data was last performed (March of 2019) the September 2, 2017 SA FTU was revised from 293,000 to 300,000. This revision was done without revising the "final" NSA FTU value of 250,627. Will there be a celebration when we hit the 5-year anniversary of the SA FTU under 300,000?

The NSA Continuing Claims claims data  was recorded at 1,461,948 claims. This is  fewer NSA CC than we had between October 8, 1988 (1,556,889 claims) and September 1, 2018 (1,495,918) claims. We have 2 million more covered insured and 34,000 fewer people receiving benefits. The continuing claims level should continue to drop through the first week of October.

The Seasonally Adjusted CC level was reported at 1,661,000 claims - 200,000 claims higher than the NSA CC level. This could have been reported as low as 1.650 million claims. Either way, the Seasonally adjusted CC streak that started April 1, 2017 is still intact.

The Insured Unemployment Rate (IUR) fell to a non-seasonally adjusted 1.01%. the best during the 1970s was 2.03%. The best during the 1980s was 1.55%. The best during the 1990s was 1.45% The best during the "00's" was 1.36% The Lowest NSA IUR that we had between January of 1967 and November of 2017, fifty plus years, was 1.11%.  last year, at this time, the NSA IUR was 1.05% on its way to 0.95%. This column has been projecting that the NSA IUR could drop below 0.90% this year. It is still possible.

The weekly unemployment claims report is the most "current" of the regular reports on unemployment or employment that we receive. The Jobs report data is released on the first of the month after being collected on the 12th of the prior month. The Jolts report is released one week and one month behind the jobs report. This month we received the July JOLTS Job Opening and Labor Turnover Survey data and the August Employment Situation Data.  The NSA CC level and the NSA IUR level is expected to coast lower from this week's level until the first week of October, even as the NSA FTU level may climb a little.

Do not succumb to the "we have more job openings than unemployed workers" gibberish. The JOLTS job openings data is comparable to, not identical to, the CES Current Employment Statistics data on workers and wages. The official U-3 unemployment level comes from the CPS Current Population Survey on jobs and unemployment. They have different sample sizes and are measuring different economic measures. The CPS and CES data have been seriously out of whack this year. "Out of whack" is a polite way of saying FUBAR which is a polite way of saying....

Watch the Multiple Job Holder Levels in the Employment Situation Reports through the end of the year. The best form of unemployment insurance is a second job. We normally hit peak MJH during November or December as employers hire more employees for the Christmas Holiday business crush. People who lose one of their multiple jobs still has a job and does not qualify for unemployment benefits. We are also seeing an elevated level of dual part-time job workers. We had the most August  FT PT jobs workers and  the second most August PT PT workers with 4.581 million FT PT workers and 1.957 million PT PT workers, respectively.

How low can these values fall? It was during 2015 that there was a minor uptick in the NSA FTU level before the traditional low week of the year. There will be variations from year to year based on how the calendar fall and what the hurricane season is like that year. We just have to watch the peaks and the troughs. Eventually the NSA FTU level and the NSA CC level may be higher than it was the prior year simply due to record levels of workers being covered by unemployment insurance benefits. We have had eighteen weeks with the NSA level under 200,000 only during 1967 and 2018, and now 2019.The IUR will give us some insight if that increases then there may be a change afoot.

It's the Economy.