| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 208K | 201K to 210K | 203K | 206K | 207K |
| Initial Claims - Change | -4K | -6K | -5K | ||
| 4-Week Moving Average | 205.5K | 204K | 204.25K |
Highlights
Initial jobless claims last week maintained its holding pattern just above the 200,000 mark for the third consecutive week and the four-week moving average inched higher. Longer-term claims remain just below 1.8 million. This focus remains on inflation data for August before the September 15-16 FOMC meeting.
Initial jobless claims came in lower than expected, with the level reported in the week ending August 22 down 4,000 from the revised 207,000 level reported for the prior week (previously 206,000). The August 22 week’s level compares to the consensus of 208,000 in the Econoday survey of forecasters. The four-week moving average is up by 1,250 to 205,500 in the August 22 week.
Seasonal factors had expected a minor decrease in unadjusted claims of 207 (-0.1 percent) from the previous week but instead fell 3,231 (-1.9 percent).
No states reported a notable rise or a significant decline in unadjusted first-time claims.
Insured unemployment was at 1.778 million in the August 15 week, with the prior week’s level revised down to 1.796 million from 1.799 million. Continuing claims are lower by 164,000 vs. the same week a year ago. The four-week moving average is up 250 to 1.789 million, from 1.788 million in the August 8 week.
The insured rate of unemployment remained at 1.2 percent in the August 15 week.
Market Consensus Before Announcement
Claims expected nearly flat at 208K from 206K 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.
