Every week the Department of Labor releases the unemployment claims report. They have been promoting a FACT (False Assertion Considered to be True) that we have had over 80 consecutive weeks of fewer than 300,000 seasonally adjusted (SA) first-time (FTU) claims. They have also promoted other FACTs regarding "best first time claims since____" or "best continuing claims (CC) number since_____" or best 4 week average since. These are all based on seasonally adjusted numbers not the non-seasonally adjusted (NSA) or unadjusted data with which we live. This week was no different.
This week there were four FACTs promoted:
- We have had 89 consecutive weeks of under 300,000 seasonally adjusted weekly claims (it's been 39 weeks);
- The 235,000 SA FTU claims number was the lowest since November 24, 1973
- This was the lowest SA CC number since April 15, 2000
- The is was the lowest four week average for continuing claims since June 17, 2000.
This week we saw 225,366 NSA FTU Claims Reported. This was a sixteen year low. The problem is that the data from the past two weeks were revised upward. The data from October 29 was revised up from 244,942 to 245,751. This is still a sixteen year low. The datum from November 5th was revised up from 257,973 to 258,600. This, too, is still a sixteen year low. We are experiencing historically low FTU claims numbers because we have a historically high level of people working two jobs and a near historic low participation rate.
It is not the lowest SA FTU claims since 1973 - Trust Me - It could have been reported lower or higher than it was. The SA FTU number could have been reported as low as 187,000 or as high as 245,000. The 235,000 number was the "Goldilocks" number that doesn't get too many people asking too many questions. This column has written numerous articles debunking FACTs and finds that it is not worth the effort to FACTcheck every FACT. Seasonally adjusted data is misleading at best and corrupt at worst.
The Continuing Claims Number is also at a Sixteen Year Low. They are saying that this is the lowest weekly number since April 15, 2000 - a totally different season. They are saying it is the lowest four week average since June 17, 2000. Another totally different season. FACTs. Th truth is that this is the lowest the NSA CC number has been during this week of the year for the past 16 years. If someone wants proof that these numbers are wrong, it is pretty simple to do. Substitute the data for this week with the data for the week(s) in question and compute the possibilities of 2016 data with the prior year seasonal factors and the prior year's data with the current year's seasonal factors. Simple and time consuming.
We are heading towards a Scrooge Spike in a few weeks for the First-time Claims number and a real unemployment spike at the end of the year.There will be lay-offs recorded in the January Jobs Report. This is why they use seasonally adjusted data. If you are receiving layoff notices and unemployment benefits do not be frustrated. You are not alone.
It's the economy.