Lucky 13 - Heading Toward Lucky 14, 15, 16, 17, and 18
This column has been writing articles regarding the weekly unemployment claims for years. The data that is reported, when it is reported, is the seasonally adjusted (SA) first-time unemployment (FTU) claims data. A second component that is rarely mentioned is the seasonally adjusted continuing claims (CC) data. The seasonal factors used to covert the NSA data to the SA data change by category, week, month, season, and year. The media used to cover the SA FTU streak for weeks under 300,000 claims. This FACT, a False Assertion Considered to be True, is one of the economic urban legends that started under the Obama Administration. If the seasonally adjusted number of 300,000 claims is mystical then a number under 200,000 claims, seasonally adjusted or not, should be "Nirvana." We have had some weeks where the NSA FTU was under 200,000 claims. This never happened between the end of 1973 and the Fall of 2015.
Normally we hit our annual low for first-time claims the final week of September. Normally we hit our continuing claims low during the first week of October.
Last year the United states was dealing with Hurricanes Harvey, Irma, and Marie. The SA FTU streak almost ended September 2, 2017 when we had 293,000 SA FTU claims reported. The country had more important items of concern than FACT streaks. How did we do this week?
Lucky 13 it is. The NSA FTU Claims number dropped by almost 2% to 172,355. The data from the prior week was revised slightly higher than originally reported, and now sits at 175,745. This week's level is the lowest it has been recorded since June 16, 1973. This is the thirteenth time this year that the value was recorded under 200,000, tying the number of weeks under 200,000 during 1973. This is the sixth consecutive week with claims recorded under 200,000 and the lowest value so far. This column has been speculating as early as April of this year that by the end of this month that the NSA FTU value could be recorded under 150,000. We are nearly 80,000 claims lower than we were the same week last year. Last year we were bottoming at 195,000 claims. If we drop by as much as we did last year, between the first and second week of September, this number could fall under 150,000 claims, and even under 140,000 claims. When will Tesla Derangement Syndrome end and when will people in the news start reporting this breath-taking level of unemployment claims?
The Seasonally adjusted value could have been reported under 200,000 claims. That said, the SA FTU could have been reported as high as 240,000 claims. This column has pounded the table regarding the level of "covered insured" now as compared to 45 and 50 years ago. We have over 141 million covered insured now compared to roughly 53 million during 1973. There is no real comparison. This is historic.
The Non-seasonally Adjusted Continuing Claims level dropped below 1.6 million. We are within 50,000 claims of the lowest level of continuing claims in over a generation. The lowest point of the year for NSA CC is normally either the first week of October or the first week of November. This data is for the final week of August. We are 216,000 continuing claims lower this week than the same week last year. If this holds then we could see a value of 1.38 million continuing claims by the first week of October. "Nobody" pays attention to this data. This data is different from the official U-3 unemployment claims level that is reported in the monthly employment situation report. These people are people who had jobs, lost them, and are looking for work. The U-3 data counts those people who say that they are actively looking for work and cannot find a job.
The continuing claims data could have been reported slightly lower or seriously higher than it was "reported." The SA CC value could have been reported between 1.703 million and 1.923 million. Just as this column has projected a value for the NSA FTU to fall below 150,000 this column has questioned if we could challenge the NSA CC value recorded during October of 1973 (1.252 million.) Logic would say that if we are in a streak of sub-200,000 NSA FTU claims, and we are, and if the NSA FTU claims data feed into the NSA CC value, and they do, that we should have a value under 1.252 million by the first week of October, six weeks from now because there are five Saturdays during September.
Right now wild winds are blowing the the economic forest, trees (records) are falling and nobody is noticing it. This economic indicator gives us one of the most current snapshots of the economy. There was a thought during 2015 that we had hit the lowest level of NSA FTU claims that we were going to see for an extended period of time. The data for one week was higher than its counterpart during 2014, and some of the following data was ahead of the prior year's counterparts. That annual low was delayed, not denied, so the trend started looking even better for future weeks and the next year. There was another thought that the elevated levels of dual job workers was "another form of unemployment insurance." There is no "lesser employed insurance." Full-time jobs were at a record high during July. There is no doubt that some of those jobs were seasonal jobs. There is also no doubt that we will see a drop in non-seasonally adjusted full-time jobs with the release of the August Jobs Report data. The NSA U-3 data, and the able changes expected in both the NSA jobs level and the the NSA U-3 unemployment level means that we should see the official SA U-3 unemployment level fall. It is also probable that there will not be enough seasonally adjusted PT jobs to offset the drop in SA Adjusted FT jobs and the drop in SA U-3 workers, so participation should drop. This month's "historic" U-3 unemployment data should be surpassed next month, based on these seriously remarkable first-time and continuing claims data. Spread the news.
It's the economy
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