Unemployment Claims Still Sailing Along At Record Lows, Withholding Taxes Down Slightly In Q3

Employers continue to ignore the signals sent by the recent stock market fracture. They are still hoarding their low cost labor forces at a record rate, exceeding that of any past bubble in history.

First time claims for unemployment compensation continued their string of record lows for the same week of the year. The actual number, not subject to any seasonal hocus pocus was 215,000 (rounded).  That was just 1,520 claims per million employed workers last week. That compares with 1,905 per million in the same week of 2007 just as the housing bubble was beginning to implode and 1,841 in that week of 2000 a few months after the internet bubble had begun to implode.

The Department of Labor (DoL) reports the unmanipulated numbers that state unemployment offices actually count and report each week. This week it said, “The advance number of actual initial claims under state programs, unadjusted, totaled 215,483 in the week ending September 26, a decrease of 3,856 (or -1.8 percent) from the previous week. The seasonal factors had expected a decrease of 11,741 (or -5.4 percent) from the previous week. There were 227,571 initial claims in the comparable week in 2014.”

The record low is apparent on this chart.

We use actual data, as opposed to the seasonally manipulated headline numbers which Big Media shovels out for mass consumption. We need to see from the actual numbers if there’s any evidence of trend change. To do that we look at how the current week compares with the comparable week in prior years.

The actual change for the current week versus the prior week was a decline in claims of -3,800 (rounded). The 10 year average for actual data for that week was a decrease of -12,600. This year was worse than that average and worse than this week of 2014 which had a decline of -12,200. This is the second straight week where the performance was both weaker than the 10 year average and worse than last year. However, it’s still too early to say whether that hints at trend change.

Week to week changes are noisy. What matters is the trend. Since 2010 the annual change rate each week has mostly fluctuated between -5% and -15%. Last week was within that range with a year to year drop of -5.3%.