| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 213K | 205K to 215K | 209K | 211K | 212K |
| Initial Claims - Change | -3K | 12K | 13K | ||
| 4-Week Moving Average | 202.5K | 203.75K | 204K |
Highlights
Initial jobless claims decreased 3,000 to 209,000 in the week ended May 16, within the range of expectations in an Econoday survey, and slightly below the 213,000 consensus forecast.
The four-week moving average was down 1,500 to 202,500 during the week that is also the employment situation survey week.
On an unadjusted basis, claims declined 5,826 (minus 3.0 percent) to 185,625, more than the 3,385 decrease (minus 1.8 percent) expected by seasonal factors.
In lagging data for the May 9 week, insured jobless claims increased another 6,000 to 1.782 million after rising 18,000 the previous week. The four-week average was still down 6,500 to 1.773 million. The insured rate of unemployment remained stable at 1.2 percent.
Market Consensus Before Announcement
Claims expected to continue edging up to 213K from 211K last week and 199K the week before that.
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.
