| Consensus | Consensus Range | Actual | Previous | Revised | |
| Initial Claims - Level | 204K | 200K to 208K | 197K | 196K | 198K |
| Initial Claims - Change | -1K | -10K | -9K | ||
| 4-Week Moving Average | 202.25K | 203.25K | 204K |
Highlights
Still a low-hire-low-fire labor market environment. Initial jobless claims last week maintained its holding pattern just below the 200,000 mark for the second week and the four-week moving average moved lower again. Longer-term claims have fallen further away from 1.8 million.
Initial jobless claims came in lower than expected, with the level reported in the week ending September 19 down 1,000 from the revised 198,000 level reported for the prior week (previously 196,000). The September week’s level compares to the consensus of 204,000 in the Econoday survey of forecasters.
The four-week moving average is down by 1,750 to 202,250 in the September 19 week.
Seasonal factors had expected a minor decrease in unadjusted claims of 15,451 (-1.0 percent) from the previous week but instead fell by 13,371 (-0.9 percent).
Only California (+2,522) reported a notable rise in unadjusted first-time claims. No states reported a significant decline.
Insured unemployment was at 1.719 million in the September 12 week, with the prior week’s level revised down to 1.717 million from 1.730 million. Continuing claims are lower by 197,000 vs. the same week a year ago. The four-week moving average is down 13,000 to 1.744 million, from 1.757 million in the September 5 week. The insured rate of unemployment remained at 1.1 percent in the September 12 week.
Market Consensus Before Announcement
The consensus expects claims to rebound from the low 196K last week to 204K in the latest 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.
