US: Jobless Claims

Thu Sep 10 07:30:00 CDT 2015

Consensus Consensus Range Actual Previous Revised
New Claims - Level 275K 265K to 278K 275K 282K 281K
4-week Moving Average - Level 275.75K 275.50K 275.25K
New Claims - Change -6K 12K 11K

Initial claims moved lower in the September 5 week, down 6,000 to an as-expected level of 275,000. But the 4-week average, at 275,750, posted a marginal rise and is trending more than 5,000 above the month-ago trend.

Continuing claims, which are reported with a one week lag, rose 1,000 to 2.260 million for data in the August 29 week while the 4-week average fell 5,000 and is also at 2.260 million. This average is also slightly above the month-ago trend. The unemployment rate for insured workers is unchanged at 1.7 percent.

There are no special factors in this report where levels of claims remain unusually low - though not quite as low as before.

Market Consensus Before Announcement
Initial jobless claims are expected to edge back from the prior week's rise, down 7,000 to a consensus 275,000 for the September 5th week. Weekly data like jobless claims will be getting increasing attention for clues on the effects of market turbulence, which will be a key issue at this month's FOMC.

New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smooths out weekly volatility.

Jobless claims are an easy way to gauge the strength of the job market. The fewer people filing for unemployment
benefits, the more have jobs, and that tells investors a great deal about the economy. Nearly every job comes with
an income that gives a household spending power. Spending greases the wheels of the economy and keeps it
growing, so a stronger job market generates a healthier economy.

There's a downside to it, though. Unemployment claims, and therefore the number of job seekers, can fall to such
a low level that businesses have a tough time finding new workers. They might have to pay overtime wages to
current staff, use higher wages to lure people from other jobs, and in general spend more on labor costs because
of a shortage of workers. This leads to wage inflation, which is bad news for the stock and bond markets. Federal
Reserve officials are always on the look-out for inflationary pressures.

By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation looks threatening, it's a good bet that interest rates will rise, bond and stock prices will fall, and the only investors in a good mood will be the ones who tracked jobless claims and adjusted their portfolios to anticipate these events.

Just remember, the lower the number of unemployment claims, the stronger the job market, and vice versa.