Reclaiming Common Sense

The Unemployment Claims data was released with hardly a mention. The data that is released is the non-seasonally adjusted (NSA) first-time unemployment (FTU) claims data and the NSA continuing Claims (CC) data. The data that is reported, when it is reported, is the seasonally adjusted (SA) FTU claims data. rarely is the SA CC data referenced. The seasonal factors that are used to convert the NSA data to the SA data change between categories as well as by week, month, season, and year. When data from different seasons are compared FACTs (False Assertions Considered to be True) are created. The Seasonally Adjusted First-time Unemployment Claims streak is the longest running FACT. What is Reality?

The First-time Unemployment Claims level Is Lower than it was during the Second Week of December 1970. Unemployment claims tend to rise during December through the first week of January. The first-time claims data tends to drop during the second week of December.

The Seasonally Adjusted First-time Claims number could have been reported LOWER. If the seasonal factor from 2012 were applied to this year's data the number could have been reported at 223,000 claims. The accompanying table also shows that the data could have been reported higher, between 226,000 and 248,000. Any of these numbers would be considerably below the 300,000 benchmark.

The Continuing Claims data was recorded under 2 million - Again. The NSA CC Value was recorded at 1.948 million claims. This is lower than it was during the first week of December 1970 or 1971. Only the 1973 value was lower, other than those from the 1960s while the program was in its infancy.

The Continuing Claims data could have been reported lower - in the 1.870 million range. If the seasonal factor from the first week of December 2016 was applied to this year's data then the SA CC value could have been reported at  1.887 million claims. If the seasonal factor from 1988, 2000, or 2004 were applied to this week's data then the value could have been 1.868 million.

The weekly unemployment claims data gives the interested reader a glimpse into what could be expected in the monthly unemployment data in the Employment Situation Report. Next week's unemployment claims data will be from the period closest to the December 12 collection date for the employment situation report. The first-time claims data is seriously low. We have fewer first-time claims this week of December than we have had during the 2000s. The same can be said for the continuing claims data. We know that workforce is participation is improving this year even as unemployment is falling. This means that more people are working. More people working means more people spending more money on "everything." We have seen lower levels of first-time claims and continuing claims during this time of year - when we had less than half the number of people covered by unemployment insurance.  This is good news that needs to be reported.

It's the economy.