Also known as Jobless Claims (or) Initial Claims, measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the nation’s earliest economic data. The market impact fluctuates from week to week- there tends to be more focus on the release when traders need to diagnose recent developments, or when the reading is at extremes.
There are two categories of jobless claims – initial, which comprises people filing for the first time, and continuing, which consists of unemployed people who have been receiving unemployment benefits for a while. Jobless claims are an important leading indicator on the state of the employment situation and the health of the economy. Average weekly initial claims, are one of the 10 components of the Conference Board Leading Economic Index. Department of labor releases this data weekly, 5 days after the week ends.
Initial Jobless claims, rather than continuing claims are closely watched by financial market participants, since a sustained increase would indicate rising unemployment and a challenging economic environment. Since initial jobless claims may be volatile from week to week, the four week moving average of jobless claims is also observed to get better indication of the underlying trend. The strength of a nation’s economy will have an impact on the appreciation or depreciation of its currency against major currencies.
US Initial jobless claims is issued weekly by the Department of labor that tracks how many people have filed for unemployment benefits in the previous week. It is a good gauge of the U.S Job market. For Instance, when more people file for unemployment benefits, less people have jobs and vice-versa. Decline in jobless claims would be positive for base metals and energy prices and negative on bullion.
Continuing Jobless Claims refer to actual number of unemployed and currently receiving unemployment benefits who filed for unemployment benefits at least two weeks ago. US continued claims data measure the number of persons claiming unemployment benefits, and its released one week later than the initial claims. It helps gauge the prevailing employment scenario in an economy and hence its growth. Decline in jobless claims would be positive for base metals and energy prices and negative on bullion.
Initial Jobless claims have big impact in financial markets because unlike continued claims data which measures the number of persons claiming unemployment benefits, Initial jobless claims measures new and emerging unemployment.