How Low Can Unemployment Claims Go?
How low can the unemployment claims go? It is a sentence that ends in a preposition and a rhyme. The data that is reported in the vast majority of the media is the seasonally adjusted (SA) First-time Unemployment Claims (FTU) data. That is Fantasyland. Reality is the non-seasonally adjusted (NSA) FTU claims data. If you compare the data from different times of the year with different seasonal factors you produce dubious FACTs (False Assertions Considered to be True.) The seasonal factors used to convert the NSA data to the SA data changes from week to week, month to month, season to season, and year to year - even decade to decade.
The Lowest Ever July NSA First-time Claims Level Recorded. We have "scared" 200,000 claims NSA during September of 1987, September of 1999, and broke through that bottom during September of 2015 and September of 2016.
Should Have Reported an even Lower First-time Claims Level - Potentially under 175,000 claims. What is recorded is the NSA FTU value. What is reported is the SA FTU value. If they would have used the seasonal factor from the final week of July 2015 then they would have reported a value under 230,000. If they would have used the values from 1967, 1968, 1969, or 190 then the reported value would have been under 175,000 SA FTU claims.
Last Week's Continuing Claims Data was revised higher by 818 Claims - Crickets. True, the continuing claims level remains below 2 million claims. True, this is the lowest level of NSA CC for this time of year since July of 2000. True, this is one week behind the current FTU numbers. The revisions went unnoticed. I had to retrieve by screen clip from last week to make sure that it wasn't a typographical error. We are approaching continuing claims levels not seen since the 1970s. The most recent data for covered insured is 139.989 million workers. It was 52.8 million during July 1971. We have a continuing claims level comparable to a period of time when we had 88 million fewer covered insured.
Will the unemployment rate change from last month to this month. It should increase based on past data. We are at a slightly higher level of continuing claims than four weeks ago. The two data sets are not comparable. They have different sources and different definition of unemployed. Will the media ever report these historic low levels of first-time claims? What will they saw when we hit the annual low during the final week of September?
It's the economy.
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