Remarkable Unemployment Claims data
The weekly unemployment claims report includes non-seasonally adjusted (NSA) data and seasonally adjusted (SA) first-time unemployment claims data. The SA FTU claims data used to be "headline news" at the bottom of the 8:00 hour most Thursdays. A second data set is the NSA and SA continuing claims (CC) data. The SA FTU claims data was used to create a "Unemployment Claims Streak." This column has written a plethora of articles on how the "facts" of lowest SA FTU claims data were using seasonally adjusted data from different seasons with different seasonal factors. These facts were FACTs (False Assertions Considered to be True.) It is an Economic Urban Legend. Last week's unemployment claims report included a notice that the data from 2013 through 2017 was going to be revised. Yesterday this column posted an article "Watch Revisions to Unemployment Data" regarding the changes and projected that while the NSA FTU data could increase or decrease slightly, that the continuing claims data should continue to fall. The First-time claims trend is downward through September (the bottom arrow,) with a small spike during July (the middle arrow.) The top arrow is the spike that is "always" recorded during the first week of January. The Continuing Claims data has a similar High, Low, mid year spike situation. These predictable seasonal situations are why the data that is reported is the seasonally adjusted data. Here is what happened this week.
First-time Claims Dropped to 192,440 - was reported as a drop to 215,000. Last week's recorded value was revised down from 198,473 to 198,051. The official value was reduced from a SA FTU value of 228,000 to 227,000. This was the lowest NSA FTU claims level recorded since September 29, 1973. This was lower than the lowest recorded during 2015, 2016, and 2017 and we are not in the month of September, as all of the other lows were.
First Time Claims could have been reported at 213,000. If they used the same seasonal factor as was used last year then the SA FTU would have been reported at 213,500. If any other seasonal factors would have been used, for the same week of the year, the SA FTU would have been reported between 216,000 and 221,000.
Continuing Claims recorded a drop to 2.106 million claims. This is interesting because last week's NSA CC value of 2,104,251 was revised higher to 2,108,07. In this case, down is up. This is lower than any "third week of March" value since 1970. There are 183,000 fewer continuing claims this year than during 2017 for the same week. This column has asked as to whether or not we will be below 1.5 million claims during October of this year?
Continuing Claims Could have been reported under 1.8 million, even under 1.7 million claims. The seasonal factors used to convert the NSA CC value to the SA CC value skewed the data higher than it could have been.
The data that was revised was primarily the seasonally adjusted data from 2017. The seasonal factors were revised January 5, 2013 through December 30, 2017. The non-seasonally adjusted data was revised March 18, 2017 through December 23,2017. A similar edit was found in the continuing claims data. The CC seasonal factors were revised from January 15, 2013 to date. The NSA CC data was revised March 11, 2017 through December 16, 2017. The general trend is the same. This notice of data revisions seems like it was "oversold." What is important is that the seasonal factors for this week were revised and the seasonal factors for the rest of the year were posted.
These data revisions are important. We saw revisions to the Current Employment Situation (CES) data this January that dramatically reduced the growth in workers that was reported due to downward revisions to the 2015 data and sizable upward revisions to the 2016 and 2017 data. We saw revisions to the ADP data with the release of the February data that changed the trajectory of the payroll growth. Each data set normally has an advance value, a preliminary value, and a "final" value. The month retail report sees these revisions. The Gross Domestic Product (GDP) values see revisions and will see major revisions with the release of the GDP report this coming July. We had remarkable data today. How low can they go? Time will tell.
It's the economy.
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