Jack Dunn - Reclaiming Common Sense

Weekly Claims - The Unloved Economic Data

The weekly unemployment claims report used to be headline news at the bottom of the hour most Thursdays during the Obama Administration. The time :830 AM Eastern Time. The data: The Seasonally adjusted First-time Unemployment (FTU) Claims data. The data that is recorded is the non-seasonally adjusted (NSA) FTU claims. Other data that is recorded is the Continuing Claims (CC) data, the "Covered Insured" data, and the Insured Unemployment Rate (IUR) Data. WE have had sixteen weeks of NSA FTU claims under 200,000 claims this year. The Obama Administration was proud of there FACT of 97 consecutive weeks of SA FTU claims "ended" with the release of the January 19, 2017 weekly unemployment claims report. This FACT is a False Assertion Considered to be True. It is one of the many economic urban legends created since 2008. The streak did not begin when they think it did. It ended multiple times while former President Obama was in office. The data is more relevant now than ever, and is being ignored. We have had, during various weeks of this year, fewer NSA FTU claims than ever recorded for the same week of the year, going back to 1967. We have over 140 million covered insured right now. We had fewer than 53 million covered insured during 1967.  The superlatives are evading me.

The projection was for a drop in NSA FTU claims of 1% to 5% to between 168,000 and 175,000 claims and an increase in SA FTU to between 210,000 and 219,000. A second projection was for a drop in NSA CC of 0.5% to 1.5%. The NSA CC should fall to between 1.387 million and 1.401 million claims and be reported at between 1.625 million and 1.650 million claims. What was recorded and what was reported this week?

First-time Claims Fell 6.96%. This is being actively ignored. The NSA FTU value dropped from an upwardly revised 177,573 to 165,215. This was better than expected. This is only slightly higher than it was the same week of 1967, 1968, and 1969 when there were fewer than 53,000,000 covered insured.  Current we have 141.9 million covered insured. Put another way, we have 22,000 more claims for 90 million more workers.

The Seasonally Adjusted First-time Claims Data FELL to 207,000. Last year  we were at 254,000 SA FTU. The year prior we were at 245,000 SA FTU. There has been no "Hurricane Florence" spike in first-time claims. The report did indicate a jump of over 7000 claims in NC and over 2000 claims in SC. These spikes are being offset in overall reductions elsewhere

This was the Seventeenth Week this Year that the NSA FTU claims data was recorded under 200,000 claims. We have had more weeks with NSA FTU claims under 200,000 than we had during all of 2015, 2016, and 2017 combined. We have had more weeks with NSA FTU under 2000 than we had during 1973 when there were only 53.1 million covered insured. This year we are on track to surpass the number of weeks under 200,000 claims record set during 1967. There were 19 weeks with fewer than 200,000 NSA FTU claims during 1967 with five weeks under 200,000 during October of that year. We also have five weeks of data collection this October. We may drop below 160,000 NSA FTU claims during the next month. We may see a SA FTU under 200,000 claims reported depending upon the week that the low is hit.

Continuing Claims fell by 1.29%. The NSA CC value fell below 1.4 million claims. The last time that the NSA CC value was under 1.4 million was during November of 1973. It is very possible that the NSA CC value will drop below its "third rail."If we maintain the trend of being 200,000 continuing claims, or more, lower than we were during the same week last year then we could see a value at under 1.35 million claims within the next two weeks.

The Continuing claims data could have been reported lower than it was reported. The SA CC could have come in around 1.632 million claims if we used the seasonal factor used during the same week of 2012. It also could have been reported much higher is if used the seasonal factors used during the 1960s and 1970s.

The Insured Unemployed Rate is Less than 1%. This piece of data is ignored. It is the percentage of the covered insured (141.951 million) that are receiving continuing claims (1.392 million.) Tomorrow we will receive the September Jobs Report. There will be noise made about the level of unemployed workers versus the JOLTS job openings data. Remember that the JOLTS job opening data closely parallels the Current Employment Statistics worker data, not the Current Population Survey Jobs and Unemployment data. Also remember that the JOLTS data trails the Jobs data by one month. They might as well compare the JOLTS data set with the Continuing Claims Data set. My point is, they should not be conflating this data. This is historic data.

How low can the unemployment level fall tomorrow? The continuing claims data is down by 288,000 from mid-month to mid-month. If this is just a fraction of the number of unemployed, even though direct comparisons should not be made, we could see a massive drop tomorrow. What is know is that the U-3 unemployment level should drop this month and next month. We should drop below 6 million NSA U-3 unemployed workers this month. Could we rival the U-3 level recorded during October of 2001 this time next month? Possibly.

The weekly unemployment claims data is being actively ignored in the media. They might say "we received good unemployment claims data" in one breath and start talking about "ice cubes being thrown during the 1980"s in the next breath. This is good news.

It's the economy.