Are the Weekly Unemployment Data the only Game in Town?

There are multiple bits of unemployment claims datum provided in the weekly claims report: The first-time claims datum, the continuing claims datum, and the insured unemployment rate (IUR) datum. All of this data is compiled to give a snapshot of the unemployment conditions in the country. What happens if the "snapshot" is taken and no one looks at the picture? What was recorded and what was reported this week?

A near all-time record low for the first time claims for the second week of the year. First-time Claims dropped from last week's level. The first week of the year is often the highest level of first-time claims for the entire year. The data from the early part of the year is seasonally adjusted by seasonal factors to a much lower level of seasonally adjusted (SA) first-time unemployment (FTU) claims than would be recorded as the non-seasonally adjusted (NSA) FTU claims. The "pitchfork" trend is to continue lower through September. Last week's 348,709 claims was revised down to 348,131. This may sound high. Last year's first week claims was over 400,000 claims. Last year we had 21 weeks where the NSA FTU was recorded under 200,000 claims.

The seasonally adjusted first time unemployment claims could have been reported under 200,00 claims. They could have been reported under 190,000 claims. They could have been reported under 180,000 claims and under 170,000 claims. The former President touted a first-time unemployment claims streak of under 300,000 claims. This was an economic urban legend. The opportunity for the SA FTU value to be reported under 200,000 has been a constant thread in the weekly claims articles during the past year. Keeping this in mind, note how the official SA FTU is the lowest it has been for this week of the year since 1/11/1969.

Continuing Claims are the lowest they have been at the start of the year since 1973. The non-seasonally adjusted (NSA) continuing claims (CC) data was recorded at 2.172 million claims. The data from 1973 indicate that there were 2.121 million claims.

The seasonally adjusted continuing claims data was reported at 1.736 million. The value has been ignored. The "normal" level is considered to be 2,000,00 claims. There are 244,000 fewer continuing claims this year than the same week last year. The SA CC could have been reported under 1.9 million claims. It could have been reported under 1.8 million claims. The seasonal factors matter.

How many people are covered by unemployment insurance? It is here that we have to examine the number of people who were eligible for unemployment claims.  There were 143,051,794 people eligible for continuing claims this week this year. There were only 53,221,000 people eligible during the first week of January 1971. This is the earliest that the covered insured data is available. There were 56.359 million covered insured the first week of 1973.  We have 51,000 additional continuing claims for 86,000,000 more workers. This means that the percentage of covered insured is dramatically lower than the Insured Unemployment Rate (IUR) was during 1967, 1968, 1969, and in fact, lower than any other first week of January.

.

The Insured Unemployment rate is just 1.52%. There is a considerable mount of discussion that the Job Openings level is much higher than the level of unemployed workers. The U-3 unemployment level is those who answer a survey question saying that they are unemployed and looking for work. The continuing claims level is the number of people who were employed, are now unemployed, and are actively looking for work. Big Difference. We set an all-time record low of 0.95% IUR this past year. The current IUR is lower than the lowest levels recorded during 2014 and even 1988, and we normally hit our lowest IUR during October.

Job Openings do not directly compare with Unemployment levels. This column has written articles on the Job Openings Situation for a considerable period of time. "November JOLTS Records, Plural" detailed how we had record November levels for job openings, hires, quits, and total separations.

Why go into all this detail? Most newspapers have moved the weekly unemployment claims data from the front page to some page deep in the business section, in column, below the fold. This used to be bottom of the hour news scant moments after the release of the data.This data is actively ignored. If you are lucky, the first-time claims data is published in the "crawler" or "chyron" on television.  The weekly unemployment claims data is the most current data available. If, and when, the continuing claims data goes higher than the year prior, and does so consistently, we may have an indicator of a potential slow down.

Economic data is hard to find. The Government Shutdown has caused some of the economic reports to go unpublished within the past month. We did not receive the November New Hoe Sales data. We did not receive the December Treasury Report. We did not receive the December MARTS retail Report.  We most likely will not receive the December New Construction data or the December New Home Sales data.  Are these  reports essential? Are the people who create them essential workers? Some of the furloughed workers probably are essential. Some of the furloughed workers are obviously not required.

This data this week was remarkable. It should be being discussed in the media. First-time claims are historically low when the workforce population is factored into the math. The first-time claims data flows into the continuing claims data. The continuing claims data is at historic lows for the first week of January, again, adjusted for the workforce population.

The insured unemployment rate will probably drop below 0.90% this Fall. Will it be reported? We may see the NSA FTU claims level drop below 200,000 claims this February. Will it be reported?  How low can we we see these values fall? Could the NSA FTU fall below 150,000? Could the NSA CC value fall below 1.25 million or even 1.0 million? The continuing claims level is 244,000 claims lower than the same week last year. We had 1.35 million claims October 6, 2018. We should drop below 1.25 million. Watch this space.

It's the economy.