Economic Indicators: Weekly Claims for Unemployment Insurance
The Weekly Claims for Unemployment Insurance (“Weekly Claims”) is released every Thursday at 8:30 am. The Weekly Claims cover new filings for unemployment insurance during the prior week from Sunday to Saturday. The Weekly Claims report is compiled by the Department of Labor and minor revisions are provided for these releases.
The Weekly Claims release reports the total initial claims for unemployment insurance from every state and the District of Columbia. The Department of Labor collects the initial claims from every state and the District of Columbia and then totals them for the Weekly Claims release. The Weekly Claims also reports the total number of people continuing to file for unemployment insurance; however, this information is reported on a two-week lag. The Weekly Claims figures are presented as both seasonally adjusted and not seasonally adjusted.
The most recent Weekly Claims report can be accessed from the Department of Labor’s website.
Historically, during times of recession, the Weekly Claims has a tendency to behave as a leading indicator. If initial claims peak, then there is a likely probability that the recession will reach its nadir in the next few months. Generally, if initial claims are consistently above 400,000 for several weeks, then it indicates that the economy is slowing and slipping into recession. Furthermore, if inital claims are consistently below 375,000, then it indicates that the economy is recovering. Since individual weekly initial claims can be volatile, a four-week moving average is included in the release to smooth the volatility. One should not rely on one week’s figures to determine a trend. Finally, continuing claims of greater than 3 million tend to imply that the economy is facing acute difficulties. As a rule of thumb, bond investors usually prefer to see increasing claims , which could indicate the economy is slowing and inflationary pressures are easing. Meanwhile, stock investors usually prefer to see decreasing claims, which could indicate economic and corporate-profit growth as well as business expansion.
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Tagged with Department of Labor, Unemployment, Weekly Claims Unemployment
