Reclaiming Common Sense

First-time Claims and Continuing Claims recorded drops in numbers

'First-Time Claims and Continuing Claims reported rising numbers

The headline data is the seasonally adjusted (SA) first-time claims (FTU) data. A secondary number than is sometimes reported is the seasonally adjusted continuing claims (CC) data. A third number hat is rarely mentioned is the seasonally adjusted Insured Unemployment Rate (IUR.) Even when the non-seasonally adjusted data records a drop in value the seasonally adjusted data can report a rising value. That is what happened this week.

First-time Unemployment Claims fell 5.35% to 208,782 claims. It was thought that the NSA FTU claims data could fall to between 197,000 and 215,000 claims.  We are seeing first-time claims come in 4,000 claims higher than last year for 2 million more covered insured. If the SA FTU claims data was population adjusted as well as "seasonally adjusted" then we would probable have a seasonally adjusted FTU below 200,000.

The First time claims data could have been reported much lower. The SA FTU could have been reported between 204,000 and 214,000 if we used the seasonal factors from the 1960s and 1970s.

The Non-seasonally adjusted continuing claims data was recorded down 1.21% to 2.087 million claims. This is 106,000 claims lower than the same week last year. This is the lowest continue claims level, NSA or SA, for the first week of March since 1973.

The seasonally adjusted continuing claims was reported at 1.776 million claims. Normally a value under 2 million is considered good for SA CC. The 2 million mark is comparable to the 300,000 SA FTU claims value.

You cannot compare the Weekly claims data to the monthly U-3 unemployment claims, nor the monthly job openings claims. Next week we will receive the January Job Openings and Labor Turnover Survey (JOLTS) data on job opening, hires, quits and separations. Last week we received the February Jobs Report. The Jobs report is created using two data sets: The Current Population Survey (CPS) jobs and unemployment data and the Current Employment Statistics (CES) worker data. These are four different data sets with different sample sizes, different margins of error, different seasonal factors, measuring different things. It is disingenuous to make direct comparisons between the four data sets.

The Insured Unemployment Rate fell to 1.46%. You will hear that the "unemployment rate" is closer to 4%. The headline unemployment number includes those people who are not working who are looking for work. The IUR is the unemployment rate of the covered insured who recently were working. This is a huge difference. The current 1.46% IUR is lower than it was during the end of 2000 through 2014 and into 2015.  The IUR tends to fall through the end of October and into the first week of November. Last year we set an all-time NSA IUR record at 0.95%. Last year the rate was a reduction form 1.11% the prior October. This October could we drop below 0.90%? Could it hit 0.85%?

The weekly claims data is important. It is the most current data that we receive during a month. This data was collected March 9th for FTU claims and March 2 for continuing claims. Most data is collected and reported 3 weeks later. Next week's continuing claims data will give us an idea the direction that the U-3 unemployment data is heading. This data set is, again, entirely different from the CPS U-3 unemployment data. It only gives us an idea of where it is heading, not really how low it will fall. It is an indirect comparison. Things are still improving compared to last year.

It's the Economy.