Reclaiming Common Sense

Lower First-time Claims than the Same Week of November 1970

The The Weekly unemployment claims data receives no respect. The non-seasonally adjusted (NSA) first-time unemployment (FTU) claims data are at historic lows for this time of year. The continuing claims data (CC) is in a similar situation. The main thing that is being missed is that we have over 80 million more workers who are "covered" by unemployment claims insurance now than we had during the 1960s and 1970s. This program turned 50 this year. We have had nearly 9 complete years of declining first-time claims. The peak unemployment time during January has been lower each year since 2008. The continuing claims data that is for the second week of the month, normally the date closest to the 12th of the month, gives us some insight into which direction the U-3 unemployment data will be heading for the Jobs Report. We have had declining continuing claims data heading towards a comparable level to the first week of November 1988 during the past month. Did we hit it this week?

First-time Claims dropped to 233,060. This drop in the recorded NSA FTU value was reported as an increase from 239,000 to 249,000. This down is up phenomenon is not new. This column had reported so many times on this topic that it has become impossible to track.Last week's NSA FTU claims number was revised up from 241,568 to 242,078. The data for October 28 was revised slightly higher from 215,376 to 215,775. Think about this: We had not been below 200,000 NSA FTU claims since the 1970s until September of 2015. We are not seeing seasonal spikes in the NSA FTU number right now.

The First-time Claims Number was Reported at 249,000 - Should have been reported at 243,000 or 239,000 or 216,000 claims. The seasonal factors that were published on 3/23/2017 yield a value of 243,000. If we used the seasonal factors from 2012. 2013, or 2014 the reported value would have been below 220,000 claims.

The Continuing Claims Data dropped to a non-seasonally adjusted 1,614,048 claims.The number to hit for a 30 year low is 1.542 Million claims, non-seasonally adjusted. last week's data was revised up from 1,627,443 to 1,629,883. The continuing claims data gives us an idea which way the U-3 unemployment claims data may be heading for the month of November. We have fewer continuing claims now than we had during the first week of October 1999. How low can we go?

The Continuing claims data "reported" a drop to 1.860 Million claims. Once again, if the seasonal factors published this past March were used that value could have been reported at 1.838 million. A problem that currently exists is that the database going back to 1967 is no longer available. Another problem is that the seasonal factors are no longer published in advance. Also, the links to archived reports no longer exist. The NSA CC data for the first week of November is lower than the NSA CC value for the first week of November 1970 and 1971. The value should have been reported as low as 1.7895 million claims.

 We may see a level of first-time claims during the first weeks of 2018 that should dumbfound people. The following week after that level of NSA FTU claims number is ignored the NSA CC level could be the lowest since 1969. The NSA FTU value was lower during January 2017 than January 1970. January 13, 1968 the NSA FTU value was 373,000 claims. January 1, 2017 the value was 412,000. This was 90,000 claims fewer than the first week of January 2015.  If we drop half as much as the drop from 2015 to 2016 then we will be at a truly historic level.

The continuing claims data for the second week of January could gob smack people. Could we stay below the 2.17 million NSA CC level recorded January 13, 1973? Possibly. Will anybody be paying attention? I know of at least one person who will be paying attention to these reports at that time. 

This report is no longer headline news. It should be garnering at least a mention somewhere other than below the fold in the business section in a side column.  Those who ignore this data are left scratching their heads as to why the official U-3 level or U-3 unemployment rate continue to fall. Ignore this data at your own risk.

It's the economy.