7/01/21 7:30 am cst: Weekly Initial Jobless Claims fall 51K to a post-shutdown low of 364K in the latest week and below the 400K expected. No impact on the markets.
Jobless Claims (Initial)
Initial jobless claims measure the number of people (non industry-specific) filing first-time claims for state unemployment insurance. This report provides a timely, but often misleading, indicator of the direction of the economy, with changes in claims potentially signaling changes in job growth. It is assumed the stronger the job market, the greater the spending power, the healthier the economy. Weekly claims are volatile and data can be skewed by holidays; therefore, many analysts track a four week moving average of data to get a better sense of the underlying trend in claims. It typically takes a sustained move of at least 30,000 in claims to signal a meaningful change in job growth. Unemployment claims can fall to such a low level that businesses have a tough time finding new workers. This puts wage pressures on the economy, leading to wage inflation, which is bad news for the stock and bond markets. If wage inflation threatens, it's a good bet interest rates will rise and bond and stock prices will fall. This report is timely and occasionally moves the market. Although volatile and subject to big revisions, it is considered a good gauge of labor market conditions and an indicator of the employment report. The Initial Jobless Claims report is scheduled for release at 7:30 (CST) every Thursday by the Employment and Training Administration of the Department of Labor.
POTENTIAL IMPACT ON INTEREST RATES: MODERATE