Reclaiming Common Sense

Both Continuing Claims and First-time Claims recorded a drop and

reported an increase in claims.


This year has been a great year with regard to the unemployment claims data.  The headline data is the seasonally adjusted (SA) first-time unemployment (FTU) claims number. A seasonally adjusted (SA) FTU claims number has been considered "healthy" for an extended period of time. This year we saw 21 weeks with the non-seasonally adjusted first-time claims data being recorded under 200,000 claims. A second component reported in the weekly claims report is the continuing claims data. Normally a SA continuing claims (CC) value under 2 million is considered healthy. The NSA CC value was recorded at 1.349 million claims, and the SA CC value was reported at 1.639 Million claims during the week of October 6th. A third component of the report that is not receiving any attention in the media is the insured unemployment rate (IUR,) this is the percentage of the covered insured who are receiving continuing claims benefits. The IUR hit a low of 0.95%  during the week of October 6th.


There are some in the media who are making a considerable amount of commotion regarding the historically high levels of Job Openings as compared with the low level of unemployed workers. The U-3 unemployment level comes from the Current Population Survey data. The headline "jobs" data from the monthly Jobs report is obtained through the Current Employment Statistics Data. The JOLTS data is a separate survey. The unemployment claims data is another survey. The three are related, like two brothers and a nephew, and a cousin. When the seasonally adjusted data is thrown into the mix the data is squishy, at best, and misleading, at  worst. The seasonally factors change by data set, week, month, season and year.


Down is Up. This is the time of the year where up may be reported as down. The seasonal factors can change rising unemployment claims data into falling unemployment claims, or spiking unemployment claims as slight upticks. The annual low for first-time claims is normally the final week of September, and the peak is the first week of January. Continuing claims tend to bottom during the first week of October and peak during the first week of January. The trend for nearly a decade has been lower highs and lower lows for both Continuing unemployment claims and for first-time claims, even as we have grown the number of jobs and the number of covered insured.  This is why the IUR has fallen to historic lows this year. So what was recorded and what was reported this week?


Non-Seasonally Adjusted first-time claims recorded a drop of 9,000 claims. The NSA FTU value for last week was revised from 226,063 to 226,485 claims. This week the NSA FTU fell to 217,834, a drop of 3.82%, on the heels of a 4.02% drop last week.


Seasonally adjusted first-time claims reported an increase of 10,000 claims. Down is Up. The SA FTU rose from 224,000 to 234,000 claims even as the NSA FTU claims level fell. The thing is that if we used last year's seasonal factor then we could have reported a drop to under 200,000. It could have been reported between 193,000 to as high as 235,000. This is still remarkably low.


The Continuing Claims recorded a drop of 4,000 claims to 1.441 million claims. This drop is on the heels of a drop in first-time claims for the same week of the month that was reported last month. We are 270,000 claims lower than the same week of the year last year. Will we be 270,000 claims lower than we were the first week of January this year as compared to last year? Last week's NSA CC value of  1,452,750 was revised lower to 1,445,728.


The Continuing Claims data reported a pop of 50,000 claims. Down is up. Last week's 1.445 million claims was reported as 1.660 million claims. This week's 1.441 million claims was reported as 1.710 million. The SA CC value could have been reported as low as 1.555 million claims or as high as 1.744 million claims. It is important to remember that we have 142.5 million covered insured compared with 52.6 million covered insured during the fourth week of November 1971. 54.3 million claims during the same week of 1972, and 61.6 million during the same week of 1973. We had 33,000 more continuing claims for 81 million more covered insured. The NSA CC value is up slightly from the NSA CC value mid-September. The mid-month data is important because the employment and unemployment survey data for the jobs report is collected around the 12th of the month.


The Insured Unemployment Rate remains at 1.01% This is unrecognized elsewhere. This is a number that gives the talking heads headaches. The percentage of the market receiving unemployment benefits is significantly lower than the official unemployment rate. Did we have 1.637 million unemployed workers last month or 5.771 million unemployed workers? Yes and Yes. Will the NSA U-3 rise or fall this month? It should fall.  Up is down.


Ignore the data at your own peril. The weekly unemployment claims data used to garner bottom of the hour headlines on television and front page column coverage in the papers. Good luck finding it anywhere on television or in print. This is good news. The changes in the unemployment claims data should be the first indicator of a slowdown. There is no indication of it right now. The Mainstream Media focused on a Market Meltdown and "pending" recession is misplaced.


It's the economy.