Reclaiming Common Sense

Unemployment Claims Report is a Mis-Leading Economic Indicator

We still see the unemployment claims data released every week. THe recorded value is the non-seasonally adjusted (NSA) data. The reported value is the seasonally adjusted (SA) value. WE hear about the first-time unemployment (FTU) claims. Sometime they discuss the continuing claims data. We have not had 85 consecutive weeks of under 300,000 SA FTU claims - we have had 35 consecutive weeks.

First-time Claims Trending with 2015. The data for this third week of October was virtually identical to last year. There were 232,860 NSA FTU claims last year. There were 233,181 this past week.

Continuing Claims are stagnant at 1.7 million - Same as 2000. This does not mean much. The participation rate was nearly 4% lower September of 2016 versus September of 2000.  The effective unemployment rate when factoring in the lack of participation is between 9.66% and 11.77%. Near record levels of people working two jobs, and record levels of people working two part-time jobs and mean that when they lose one job they will not receive first-time claims.

The unemployment claims report is no longer a leading economic indicator - it is a misleading economic indicator.