The Initial Jobless Claims is a U.S. report that measures the number of individuals who filed for state unemployment insurance for the first time during the past week.
Continuing Jobless Claims, on the other hand, measures the number of individuals who are unemployed and are currently receiving unemployment benefits.
The Initial Jobless Claims is provided by the Employment and Training Administration of the Department of Labor, and the report comes out for viewing on a weekly basis, each Thursday.
The report provides information on the data from the previous week, ending on Saturday before.
What is Initial Jobless Claims Important?
Economists and analysts seek out clues in the Initial Jobless Claims report because of its weekly frequency, and because it reflects what is going on in the job sector.
It is viewed as a coincident economic indicator based on actual reports from state agencies around the U.S.
When looking at the Continuing Jobless Claims numbers, it is important to remember that not everyone who is jobless is entitled to unemployment benefits.
How to Read It
This number can be a predictor of how the economy is doing.
A change of at least 30,000 claims up or down is considered significant. Anything less is seen as normal fluctuations.
If the number of people filing for unemployment benefits increases on a sustained basis or is relatively high, it means a large number of people are losing their jobs and applying for unemployment compensation.
If there is a significant increase in these claims, it could potentially be pointing to slowing job growth, as unemployment rises.
In such a case, investors and traders will infer that the economy is not doing well and the next NFP report may come out weak.
Alternatively, a decline in the Initial Jobless Claims is indicative of a healthy economy and future NFP reports should reflect a more positive picture.
When the number decreases significantly, it can be a sign that the economy is accelerating in job growth and is economically sound.
Most analysts will only consider this in a four-week average, as these factors can be very volatile.
With the Continuing Jobless Claims, a rise in this number has negative implications for the NFP, since it will affect consumer spending which in turn discourages economic growth.
Generally speaking, a high reading is seen as negative for the labor market while a low reading is seen as positive.
Where to find it?
On BabyPips.com’s economic calendar, you can find its event listing.
What time is it released?
Initial Jobless Claims is released weekly, on Thursdays, at 8.30 am ET.