Reclaiming Common Sense

First-time Claims recorded a drop in claims from 199,094 to 188,697

First-time claims were reported as being unchanged at 218,000 Claims

The weekly unemployment claims data used to be headline news at he bottom of the hour. Most news sources view the unemployment claims data as fodder for the bottom of the bird cage. The headline seasonally adjusted (SA) first-time Unemployment Claims data has been under 300,000 claims since Match 7, 2015. That is a FACT, a False Assertion Considered to be True. It is an economic urban legend. The Seasonally adjusted Continuing Claims data has been under 2 million claims since April 1, 2017. That is the truth. What happened this week?

Non-seasonally Adjusted First-time claims fell to 188,697. The NSA FTU claims data does not receive "any" attention because the January highs are "too high" for most people and the September lows are "too low" for most people in the media to understand. The people in the media prefer the easier to under stand seasonally adjusted data. The problem is that because they focus on the seasonally adjusted data they missed the record 21 weeks with NSA FTU under 200,000 claims recorded last year. This is the ninth time this year that we are under 200,000 claims. This places us ahead of last year's record pace by two weeks. It is also important to note that this is the lowest that the NSA FTU claims data has been during the first week of June since 1973, and that back then we had 87 million fewer workers.

The Seasonally Adjusted first-time claims data came in at 218,000 - It could have been reported at 190,000. The seasonal factors used to convert the NSA FTU data to the SA FTU data change week to week, season to season, and year to year. If the seasonal factors for the first week of June 2014 or June 2015 had been applied to the data then the headline data would have been reported at 190,000 claims.

The Non-seasonally Adjusted Continuing Claims data came in at 1.511 million, up slightly from 1.509 million claims. Remember that for the same weeks first-time claims moved higher from 191k to 199k.  This is the lowest NSA CC value for the fourth week of May since the fourth week of May 1973. We had 1.407 million continuing claims this week of June 1973. We had 1.512 million claims this week. We had 56.4 million covered insured during 1973, and 143.6 million this week.

The Seasonally Adjusted Continuing Claims data was reported at 1.682 million claims. It could have been reported at 1.65 million claims to 1.68 million claims if the seasonal factors for the final week of May 2012-2018 had been applied to the non-seasonally adjusted data. We have had two years and two months of SA.CC under 2 million. Crickets.

The Insured Unemployment Rate remained at 1.05%. The lowest we have ever recorded prior to 2018  1.11%. We were above  1.45% from 1973 through September 5, 2015. Last May we were at 1.11%. Last year we set a record low at 0.95% during October. Could we break through 0.90%?

Yesterday we received an ADP Payroll report that did not make sense. The Private Sector Payroll data is different from the Current Employment Statistics Worker and Wage data. The ADP Private Sector data is different from the Current Population Survey Jobs and Unemployment data. The ADP data is different from the JOLTS job openings, quits, separations, and hires data. The weekly continuing claims data is different from the CPS U-3 unemployment data. We should see May U-3 unemployment fall, based on recent unemployment and jobs data.  Even though the continuing claims data has been sliding, that claims data is for people who had jobs and are looking for jobs. The CPS U-3 data is those people survey who are out of work who are looking for work. They may have been employed or they may not have been employed. Big Difference.

It's the Economy.