What is Initial Jobless Claims?

Preface

Unemployment is something that everyone is afraid to avoid. Unemployment means that you cannot earn a salary through work. At this time, many countries will temporarily help workers through this painful transition period through the payment of unemployment claims.
This article is going to show you what the number of initial jobless claims is, so keep reading!

What is Initial Jobless Claims?

Initial jobless claim is one of the data in the Unemployment Insurance Weekly Claims (UI Claims) released by the U.S. Department of Labor every Thursday. It counts the number of people who received unemployment claims for the first time in the United States last week, is a leading labor market data.

By observing the number of initial jobless claims, we are not only can judge whether the number of newly unemployed people in the United States has increased recently, and what is the trend, but also use this data to predict the unemployment rate and nonfarm employment in the United States. If a worker finds a job again after receiving initial jobless claims, but then unemployed again, as long as they meet the above-mentioned eligibility requirements, they will also be counted as initial jobless claims! Since this data is published more frequently and covers a short period of time, so the meaning of seasonal adjustment is not great, and it is easily affected by short-term events, such as natural disasters or emergencies, resulting in violent fluctuations.

Why does initial jobless claims matter?

If the unemployment rate increases, it means that most of the people have no income, everyone’s purchasing power will decline, the economy will not be good, and the company’s fundamentals will also have problems, and the stock price will be affected, forming a vicious circle. The United States is also known as a big consumer country. Nearly half of the income of many large American factories comes from the United States.

The relationship between the number of initial jobless claims and the US stock market?

If U.S. initial jobless claims fall, represents a drop in U.S. unemployment, the economy picks up, and the stock market may go higher;
On the contrary, if U.S. initial jobless claims rise, represents the rise in the U.S. unemployment rate, which is showing a recession, the stock market may go lower.

Unemployment Insurance Continued Claims

In addition to the number of initial jobless claims as a labor force indicator, the number of unemployment insurance continued claims also can be a measure. In general, unemployment insurance continued claims refer to workers who have received unemployment claims and have not found a job after 1 week and have continuously applied for the claims. Some argue that the “UI Continued Claims” data is a better reflection of true employment. Because this data is the number of continued claims of enemployment insurance, it is less volatile than initial jobless claims. The number of UI Continued Claims is not a leading indicator of the labor market, but a simultaneous indicator.
When both of the number of initial jobless claims and unemployment insurance continued claims declines, it means the economy is getting better.

Where are the U.S. initial jobless claims?

Initial jobless claims: Release last week’s data on every Thursday
Unemployment Insurance Continued Claims: Release two weeks ago data on every Thursday

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Disclaimer: Information above can only be use for references and doesn’t represent our platform’s opinions.