| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 217K | 208K to 220K | 213K | 213K | 214K |
| Initial Claims - Change | -1K | 0K | |||
| 4-Week Moving Average | 212.0K | 215.75K | 216.0K |
Highlights
Claims come in below expected at 213K, down from revised 214K in the previous week (previously reported at 213K), so basically flat. That brings the more reliable 4-week moving average down to 212.0K, down from 216.0K (revised from 215.75K) in the previous week. The Econoday consensus forecast looked for an uptick to 217K for the latest week ended March 7.
A remarkably stable picture emerges from these reports suggesting more of the same low-hire, low-fire job market Federal Reserve officials have been seeing. Of course, the latest week's report does not yet capture any impact on the job market from the unfolding conflagration in the Middle East and surging energy prices. All the data releases up until now are pretty much old news though it depends on the persistence of high and rising energy prices and other unforeseen effects from the Iran situation.
Market Consensus Before Announcement
Claims seen rising to 217K after holding at 213K in the previous 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.
