What it measures:
The Jobless Claims report keeps track of how many people have filed for unemployment benefits in the past week. The weekly releases also include a continuing claims report, as well as the initial jobless claims number.
The indicator is useful in gauging the U.S. jobs market and is used by economists, investors and the Federal Reserve to monitor job growth and emerging unemployment trends.
Nevertheless, because of the volatility in the job market reflected by this indicator, it has limited validity and is therefore released with a smoothed-out figure arrived at by taking a four-week moving average in order for analysts to get a better sense of the indicator without the extreme volatility.
What effect it has:
If the number comes out higher-than-expected, that tends to depreciate the U.S. Dollar because it indicates higher unemployment, and vice versa. Jobless Claims give a timely indication of where the economy is heading, and if considerably different from expectations, they will often affect capital markets significantly upon their release.
How often it is released:
Released weekly, the report comes out every Thursday at 8:30 AM EST.
Why it is important:
As more people file for unemployment benefits, fewer people have jobs reducing consumer spending and causing a further slowdown in the economy. When fewer people file for unemployment benefits, this indicates an expanding economy and increased consumer spending.
Jobless Claims are considered a lagging indicator of the economic situation in the United States because employment tends to be a result of economic trends and so generally lags behind other indicators more initially affected by economic factors. Nevertheless, the number is strongly-associated with consumer spending and with the labor market, so has important economic implications.
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