Jack Dunn - Reclaiming Common Sense

Seriously Low Unemployment Claims Data

The weekly unemployment claims report used to be "bottom of the hour headline news."  The weekly claims data gives us some insight as to what is going to happen with the monthly U-3 unemployment level. Last week this column wrote in "Can Unemployment Fall through September" that we need to pay attention to the Insured Unemployment Rate, in addition to the real, non-seasonally adjusted (NSA) first-time unemployment (FTU) claims data and the Continuing Claims (CC) data. Remember that the seasonal factors used to convert the NSA data to the SA data change category to category, week to week, month to month, season to season, and year to year. Remember that there are ninety million more covered insured now that there were during the early 1970s.  What happened this week?

First-time claims recorded a slight uptick; Still close to 200,000 Level. The headline number is the seasonally adjusted first-time claims data was the lowest since June 14, 1969.The non-seasonally adjusted claims data was the lowest during June since  30th 1973.

First-time claims were reported at 217,000. The seasonal factors change from week to week,  month to month, and year to year. How low can the first-time claims level fall? Can we drop under 175,000 NSA FTU claims? Will the SA FTU be reported under 200,000?

Continuing claims recorded at 1.555 million claims. This is lower than any week last year. This is the lowest since November 5, 1988. June 2, 1973 was lower - with only 58 million covered insured, compared to today's 141.4 million covered insured. How low can this value fall? Is 1.252 million still within reach?

Continuing Claims were reported Down 51,000 Claims to 1.697 million claims. This is important because the trend is lower, and because this will give us some insight as to where the SA and NSA U-3 unemployment numbers may be for the month of May

The insured unemployment rate dropped to 1.1%. The seasonally adjusted rate stayed at 1.2%. How low can this fall? Last week it was proposed that it could fall below 1%. The question was whether or not it would fall to zero? What would be reported?

The data reported this week was for the first week of June for the continuing claims data. Next week we will receive the data for the second week of June, the collection date closest to the collection date for the Current Population Survey data that is used for the employment situation report for June. Currently the NSA CC rate is 50,000 claims fewer than the data for mid May. The SA CC value is also down by a comparable amount at 45,0uld se00 claims fewer. We should see a drop of at least 100,000 U-3 unemployed workers during May. The two may not directly correlate as people say that they are unemployed and looking for work for the survey and are not receiving unemployment benefits because they have not worker recently. This is good data. It is being ignored.

It's the economy.