| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 215K | 209K to 230K | 207K | 219K | 218K |
| Initial Claims - Change | -11K | 16K | 15K | ||
| 4-Week Moving Average | 209.75K | 209.5K |
Highlights
Initial jobless claims numbers for last week surprised to the low side, following the prior week's higher-than-expected reading. Employment conditions have stabilized at a slow hiring pace coupled with a low level of layoffs. Continuing claims now appear to be entrenched below the 1.9 million threshold.
Initial jobless claims came in lower than expected, with the level reported in the week ending April 11 down 207,000 from the revised 218,000 level reported for the prior week (previously 219,000). The April 11 week's level compares to the consensus of 215,000 in the Econoday survey of forecasters. The four-week moving average rose by 500 to 209,750 in the April 11 week.
Seasonal factors had expected an increase in unadjusted claims of 23,749 (+11.8 percent) from the previous week, but instead there was a smaller rise of 12,116 (+6.0 percent).
Only New York (+8,287) reported a noticeable increase in unadjusted first-time claims, while Illinois (-2,116) and Oregon (-3,235) reported significant declines.
Insured unemployment was at 1.818 million in the April 4 week, with the prior week's level revised to 1.787 million from 1.794 million. Continuing claims are lower by 58,000 vs. the same week a year ago. The four-week moving average is down 8,250 to 1.813 million, from a downwardly revised 1.822 million in the March 28 week. The insured rate of unemployment remained at 1.2 percent in the April 4 week.
Market Consensus Before Announcement
Claims seen back down at 215K after jumping by 16k to 219K in 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.
