First Time Claims Were Expected to Drop Even with

The Ongoing Government Shutdown - And They Did!

There was a time when the first-time unemployment claims report was bottom of the hour headline news. That same report is now bottom of the birdcage material. That is unfortunate because we have had record setting unemployment data during 2019, and 2019 could obliterate those records.

Last year we set two all-time records. Last year we set an all-time low Insured Unemployment rate of just 0.95%. This is the percentage of the covered insured who are receiving continuing unemployment claims. We also had a record 21 weeks with the non-seasonally adjusted (NSA) first-time unemployment (FTU) claims being recorded under 200,000 claims.ta

The Devil is in the Data. The "headline data is the seasonally adjusted (SA) first-time FTU data. The seasonal factors change week to week, month to month, and year to year. We normally have our worst NSA FTU c;aims during the first or second week of January. We normally have our lowest NSA FTU during the final week of September. These variations are seasonally adjusted so when people here the SA FTU right after Christmas there aren't millions of workers asking "Am I Next?" The same is true for the Continuing Claims data. What was recorded and what was reported this week?

The projection was for a larger than 20% decline in NSA FTU Claims data this week, even with the Shutdown. Last week there were 10,454 Federal Workers who applied for unemployment benefits, up from 4,760 the prior week and up from 1,148 the prior year. The projection for 18% to 22% decline, with the outside chance of a 24%-26% decline, was posted on Twitter yesterday. A SA FTU was expected in the range of roughly 199,000 to 211,000. It was possible for something to be reported between 185,000 and 192,000 SA FTU, based on the seasonal factors posted on the Department of Labor website.

First-time claims were recorded at 267,921. Where it was headline news if the SA FTU value was reported under 300,000 nobody pays attention to the NSA FTU data being under 300,000 claims. This level is comparable to what we had during the same week of 1969. It is slightly higher than last year at this time - possibly due to the government shutdown. The Federal Workers data is only available for last week, January 12, and the prior week, January 5. The number of NSA FTU claims were revised lower from 344,916 to 344,479.

First-time claims reported at 199,000. Crickets. The SA FTU claims data could have been reported under 190,000. It could have been reported under 180,0000. It could have been reported under 170,000.

The projection for the continuing claims data was for a decline of 2% to 5% to be recorded.  If the continuing claims data fell by this much the recorded NSA CC value should have been between 2.06 million and 2.12 million. The trend has been downward since January 14, 2009. We may drop below the 1.252 million claims level set during October of 1973 by the first week of this October.

Continuing Claims were recorded at 2.089 million claims. This is 198,000 fewer claims than the second week of January 2017. This is comparable to the low of 2006 that was recorded during October of 2006. How low can we see this value fall this year? Last year we dropped to 1.351 million.

Continuing Claims were reported at 1.712 million claims. This was a drop from last week's 1.737 million claims. They could have been reported under 1,7 million, under 1.6 million, and even under 1.5 million claims.

The Insured unemployment rate was 1.46%. This is better than the best for all of 2014. This is better than the best IUR for 1988 and comparable to the best for 2000.

Seasonal Factors matter.  One of the reasons why the projections for the NSA FTU and NSA CC were made was to manage expectations. A second reason was to post the previously published seasonal factors with a time-stamp. Soon they will be revising the published seasonal factors and publishing them for the rest of the year. The data this week could have, and should have, been reported better than it was "reported."

The jump in Federal worker unemployment claims is interesting. They could be denied benefits because they are furloughed, not fired. This was a great report. It was remarkable. Share it.

It's the economy.