Weekly Unemployment Insurance Claims

What is it: Tracks new filings for unemployment insurance benefits.

Link to most recent release: UNEMPLOYMENT INSURANCE WEEKLY CLAIMS

Release time: 08:30 on first Thursday and covers the last week ending on Saturday

Frequency: Weekly

Source: Department of Labor

Revisions: Minor

Why is it important

The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. A person who has already filed an initial claim and who has experienced a week of unemployment then files a continued claim to claim benefits for that week of unemployment. On a weekly basis, continued claims are also referred to as insured unemployment, as continued claims reflect a good approximation of the current number of insured unemployed workers filing for UI benefits.

How is it computed

An initial claim is a claim filed by an unemployed individual after a separation from an employer. The claimant requests a determination of basic eligibility for the UI program. When an initial claim is filed with a state, certain programmatic activities take place and these result in activity counts including the count of initial claims. 

Highlights

General rule of thumb is that if first time claims stand above 400 000 for several weeks its symptomatic of a weakening economy. 375 000 and under tells us companies are laying off fewer workers. For establishment survey to show any meaningful jump in payroll employment, first time claims must remain below 325 000.

Always use 4-week moving average.

Total number of people collecting unemployment benefits is very useful in knowing the overall state of the economy. 3 million to 3.5 million shows weakening labor market.

Insured Unemployment rate tells us the story of the % of workers claiming the benefit as part of everyone eligible to claim it.

Market Impact

Bonds

More unemployment insurance filings signals weaker economy which in theory should increase bond prices.

Stocks

Weaker economy pushes away investors to deploy their capital in stock markets in other countries.

Dollar

Weaker economy = weaker dollar.