| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 215K | 215K to 220K | 205K | 213K | |
| Initial Claims - Change | -8K | -1K | |||
| 4-Week Moving Average | 210.75K | 212.0K | 211.5K |
Highlights
Initial claims numbers for last week surprised to the low side, declining for the third consecutive week. This provides more evidence employment conditions have stabilized at a slow hiring pace coupled with a low level of layoffs. Continuing claims have come in below 1.9 million for 12 straight weeks, as employers' 'no-hire, no-fire' approach remains entrenched.
Initial jobless claims came in lower than expected, with the level reported in the week ending March 14 down 8,000 from the unrevised 213,000 level reported for the prior week. The March 14 week's level compares to the consensus of 215,000 in the Econoday survey of forecasters. The four-week moving average dipped 750 to 210,750 in the March 14 week.
Seasonal factors had expected a drop in unadjusted claims of 8,751 (-4.2 percent) from the previous week, but instead there was a larger decline of 16,822 (-8.1 percent).
Only Kentucky (+3,310) reported a noticeable increase in unadjusted first-time claims, while California (-4,022), Missouri (-3,324), and New York (-2,753) reported significant declines.
Insured unemployment was at 1.857 million in the March 7 week, with the prior week's level revised down to 1.847 million from 1.850 million. Continuing claims are lower by 19,000 vs. the same week a year ago. The four-week moving average is down 2,000 to 1.851 million, from a upwardly revised 1.853 million in the February 28 week.
The insured rate of unemployment remained at 1.2 percent in the March 7 week.
Market Consensus Before Announcement
Claims seen at 215K in the latest week versus 213K in the previous week as new claims remain subdued.
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.
