Thread by @Darky999

Super interesting insight from @edwardnh today in the @RealVision Daily Briefing @RaoulGMI

Here is the data from FRED that backs it up, his point is that Initial Jobless Claims are going to skyrocket due to a known Seasonal Adjustment (remember claims quoted by media = SA)

1/N

Here is the NSA / SA data for Initial Claims (*100), you can see a fairly predictable pattern for the last 5 years, the NSA:SA ratio can therefore be roughly predicted moving forwards

@DiMartinoBooth @chigrl @PriapusIQ

2/N

Let's zoom on last 1 year, if we assume the same pattern then the NSA:SA ratio will be as per the left side of the graph (this is 1 year ago, so is the same week of the year), so in July it's going to go from 110 down to 80, this is important... @EconguyRosie @AshBennington

3/N

...it's important as this means that the SA number will increase substantially (as ratio <100) and so the NSA number will be far higher

So even if NSA Jobless Claims drop (and btw, they DIDN'T last week, SA did as the ratio was 115...), the SA can still go up...

4/N

...and if NSA actually stay flat or go up, then NSA will rocket up (if SA = 1.5m, then NSA will be 1.5/0.8 = 1.875m), and I don't think the market is expecting this

Furthermore, one has to keep an eye on PUA (Pandemic Unemployment Assistance) claims too, which are new...

5/N

...so they don't get Seasonal Adjusted, and they are hovering at around 1m / week at the moment; these are at a Federal level, so don't get included in the State Claims (which are the 'Initial Claims' we know)

FIN