| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Initial Claims - Level | 222K | 215K to 227K | 218K | 224K | 227K |
| Initial Claims - Change | -9K | 9K | 12K | ||
| 4-Week Moving Average | 212.25K | 207.75K | 208.50K |
Highlights
Initial jobless claims decreased 9,000 to 218,000 in the week ended February 3, slightly below the 222,000 consensus estimate in an Econoday survey.
Despite the weekly claims decline, the four-week moving average was up 3,750 to 212,250, the highest level since the December 23 week.
Insured jobless claims fell 23,000 to 1.871 million in the January 27 week after two weeks of cumulative increases of 88,000. The insured rate of unemployment edged down a tenth to 1.2 percent.
Despite the weekly claims decline, the four-week moving average was up 3,750 to 212,250, the highest level since the December 23 week.
Insured jobless claims fell 23,000 to 1.871 million in the January 27 week after two weeks of cumulative increases of 88,000. The insured rate of unemployment edged down a tenth to 1.2 percent.
Market Consensus Before Announcement
Jobless claims for the February 3 are expected to come in at 222,000 versus 224,000 in the prior week.
Definition
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.
Description
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.
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.
