Sweet Sixteen Unheralded

We have been receiving solid to strong economic data during the past year. One of the regular data points that we receive, in addition to the jobs report and the new hoe sales, existing home sale, and new home construction data points, is the weekly unemployment claims data. The headline data is the seasonally adjusted (SA) first-time unemployment (FTU) claims data. Another piece of information is the seasonally adjusted continuing claims (CC) data. There are non-seasonally adjusted (NSA) components for each data set. The seasonal factors used to convert the NSA data to the SA data change by category, week, month, season and year. This week the NSA FTU claims were expected to drop by up to 5% or creep higher by 0.25%. The SA FTU was expected to fall between 193,000 and 204,000 claims. The continuing claims data trails the first time claims data by one week. The continuing claims data for the third week of September was expected to drop 2% to 5% to a near historic low between 1.387 million and 1.431 million claims. The SA CC was expected to drop between 1.636 million claims and 1.687 million claims.

The under 300,000 first-time unemployment claims streak continues - That is a FACT. The Obama administration used to tout the under 300,000 claims streak - a False Assertion Considered to be True. It was an economic urban legend. It did not start when they said it did. The "streak" ended multiple times. The most recent "end" was during November of 2016. The real story is that we have had historically low first-time claims data, NSA, multiple times this year. What was recorded, non-seasonally adjusted, and what was reported, seasonally adjusted?

First-time Unemployment claims increased slightly to 176,687. This level is 36,300 claims lower than the fourth week of September data for last year.  This was the sixteenth time that the NSA FTU level has been below 200,000 claims this year. The most times that the NSA FTU claims data has been under 200,000 claims was 19 times during 1967. That was the first year that the unemployment claims program was in existence. We saw first-time claims drop under 200,000 during February of this year. We saw NSA FTU claims remain under 200,000 through October of 1967. We have one more week of claims for September and five more weeks during October. We could see 22 weeks with claims under 200,000 this year.

First-time Claims could have been reported higher than they were reported. The important thing to understand is that they could have been reported as high as 237,000 claims and that this number would still be 21,000 claims lower than last year and 8 thousand claims lower than 2016.

Continuing Claims were recorded at 1.406 Million claims. The last time we had a recorded NSA CC value this low was November 4, 1972 when we had 1.377 million claims. The trend is continue dropping through October.  The 1.252 million claims level recovered during the week of October 6, 1973 is within reach.

Continuing Claims could have been reported lower or higher than they were reported.  If we used the seasonal factors used during 2000-2005 or 2012-2017 for the same week of the year then we would still have had continuing claims reported under 1.7 million claims. A value under 2 million has been considered to be healthy.

The Insured unemployment rate stayed steady at 1.0%. This week this column produced an article titled "How Good are the Weekly Unemployment Claims (Part 2.)" The IUR is calculated by dividing the number of continuing claims (1.408 million) by the number pf covered insured (141.9 million.) The calculated value is 0.9923%. This is a drop from last week's calculated value of 1.03%, The IUR is only reported to the tenth of one percent decimal place. This value may be reported at the 0.9% level within the next four to five weeks.

The weekly unemployment claims report used to be headline news as the seasonally adjusted first-time unemployment claims was dropping from 655,000 SA FTU during the week of 2/21/2009 to 500,000 SA FTU for the week of 2/20/2010, and 402,000 during the week of 2/5/2011. It took until the week of 7/9/2014 for the SA FTU to fall to 295,000. It appears that when the Obama Administration stopped referencing the number of consecutive weeks of SA FTU claims under 300,000 claims streak that he media lost interest in the streak. We are in a historic period of time where unemployment is falling and employment is rising. The data speaks for itself.

It's the economy.