Jack Dunn - Reclaiming Common Sense

The weekly unemployment claims number, non-seasonally adjusted (NSA) first-time unemployment (FTU) claims was recorded under 200,000 claims for the twelfth time this year. The seasonally adjusted (SA) FTU claims was reported at 212,000 claims. The continuing claims data was recorded under 1.7 million claims, NSA CC, and the SA CC was reported just over 1.7 million claims. The seasonal factors used to convert the NSA data to the SA data change by category, week, month, and year.

Where are the headlines? It was promoted under the Obama Administration that there was a SA FTU streak under 300,000. The former administration stopped promoting that streak around the time of the election of President Trump. That streak was a FACT) False Assertion Considered to be True. It was one of the former administration's economic urban legends. So far this year the NSA first-time unemployment (FTU) claims data has been recorded under 200,000 eleven times: (2/24, 3/17, 3/24, 4/28, 5/5, 5/12, 6/2, and 7/28, 8/4,  8/11, and 8/18.) We were under 200,000 NSA FTU claims four times during 2017 (7/29, 8/12, 8/19, 8/26,) twice during 2016 (9/10, 9/24,)  and once during 2015. Normally we hit our annual low for first-time claims the final week of September. We had a total of 13 weeks under 200,000 NSA FTU claims during 1973. It is important to note that there were five weeks of NSA FTU claims under 200,000 during September of 1973. We have five reporting weeks this month.

The Non-seasonally adjusted first-time claims data was recorded at 175,421. We are already 20,000 claims lower than the lowest week of 2016. We are already 25,000 claims lower than the lowest week of 2016.  The thing to remember is that during the same week of 1973 that there were 60.8 million covered insured. This week there were 141.9 million covered insured. There were 15,000 fewer claims for 81 million more covered insured.

When will we drop below 200,000 Seasonally Adjusted First-time Unemployment Claims? The seasonally adjusted first-time claims level could have been reported under 205,000. The 212,000 SA FTU claims is seriously low. It could have been reported under 205,000. How low can the NSA FTU claims level fall? How low can the SA FTU value fall? If we drop 28,000 claims, as we did during 2015, then we could hit 147,000 NSA FTU claims If we drop 22,000 claims as we did during 2016 then we could hit 153,000 NSA FTU claims within the next two weeks. If we hit 150,000 claims two weeks from now when the seasonal factor is 79.5 then the SA FTU would be reported at 189,000 claims. The question is when will the seasonal factors for the remainder of the year be revised?

The Continuing Claims data fell to a recorded 1,622,571. This number received very little attention. The continuing claims data lags the first-time claims data by one week. The continuing claims data last week was 1.668 million. The thing to remember here is that we are currently 220,000 NSA CC claims lower than we were during the same week last year. If we drop 220,000 claims by the first week of October then we will set a near record low for the first week of October when we drop to roughly 1.34 million claims. The last time that the NSA CC value was under 1.5 million was November 17, 1973

Will this impact the official unemployment number for August? This is the week closest to the collection date for the monthly employment situation report, or jobs report. Last month we had roughly 1.76 million claims around the 12th of the month. The two unemployment reports straddled the collection date. Not all unemployed worker receive unemployment benefits. Will we see a drop of 100,000 U-3 unemployed workers? Will we see a drop of 200,000 or 300,0000 U-3 unemployed workers? The Jobs Forecast article will look into that possibility. How low can the NSA CC fall? We had a streak of under 1.5 million NSA CC claims between 8/25-1973 and 11/17/1973.

The SA Continuing Claims data could have been reported higher, if it was reported at all. We have had lower SA CC values reported during the third week of August.  The trend is down through the first week of October. It could continue dropping through the Christmas Season.

What will it take for the media to actively cover this story? What will be said when the SA FTU value is reported under 200,000? What will be the story when we drop below 1.5 million SA CC? Will we drop below 1.3 million NSA CC? It would probably take a miracle. The media has TDS. There are many forms of TDS:

  • Trump Derangement Syndrome
  • Twitter Derangement Syndrome
  • Tesla Derangement Syndrome
  • Tariff Derangement Syndrome
  • Tax Derangement Syndrome
  • Trump-Russia Derangement Syndrome
  • Top-line Derangement Syndrome
  • Tired-Of-Winning Derangement Syndrome

We need people to pay attention to the economic data.

It's the economy.