| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 210K | 205K to 220K | 214K | 207K | 208K |
| Initial Claims - Change | 6K | -11K | -10K | ||
| 4-Week Moving Average | 210.75K | 209.75K | 210K |
Highlights
The volatile trend continues in initial jobless claims, with a rebound in last week's headline number following the prior week's lower-than-expected reading. Employment conditions have stabilized at a slow hiring pace coupled with a low level of layoffs. The downward trajectory in longer-term claims below the 1.9 million threshold continues.
Initial jobless claims came in a little higher than expected, with the level reported in the week ending April 18 up 6,000 from the revised 208,000 level reported for the prior week (previously 207,000). The April 18 week's level compares to the consensus of 210,000 in the Econoday survey of forecasters. The four-week moving average rose by 750 to 210,750 in the April 18 week.
Seasonal factors had expected a decrease in unadjusted claims of 15,998 (-7.4 percent) from the previous week, but instead there was a smaller decline of 9,736 (-4.5 percent).
Only California (+2,211) and New York (+3,033) reported noticeable increases in unadjusted first-time claims, while New Jersey (-4,366), and Pennsylvania (-2,824) reported significant declines.
Insured unemployment was at 1.821 million in the April 11 week, with the prior week's level revised to 1.809 million from 1.818 million. Continuing claims are lower by 19,000 vs. the same week a year ago. The four-week moving average is up 1,250 to 1.812 million, from a downwardly revised 1.811 million in the April 4 week. The insured rate of unemployment remained at 1.2 percent in the April 11 week.
Market Consensus Before Announcement
Claims expected back up to 210K toward the 4-week moving average of 209.75K from 207K last 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.
