What Are Jobless Claims?
Let me explain jobless claims directly: they're a weekly statistic from the U.S. Department of Labor that counts people filing for unemployment insurance benefits. You'll see two main categories here—initial claims, which are for those filing for the first time, and continuing claims, for the unemployed who've already been getting benefits. I consider jobless claims a key leading indicator for the employment situation and the economy's overall health.
Key Takeaways
Jobless claims give you a measure of how many people are out of work at any time. Initial claims cover new filers for benefits, while continuing claims track those still receiving them. When more people who want to work can't find jobs, it's usually a bad sign for the economy. And since weekly data can swing wildly, I recommend watching the four-week moving average, as many economists do.
Understanding Jobless Claims
You need to know that jobless claims are a vital tool for macroeconomic analysis. The Department of Labor puts out a weekly report tracking new filings from the previous week, making it a solid gauge of the U.S. job market. If more people are filing, it typically means fewer jobs are available, and the opposite holds true.
As an investor, you can use this to gauge the country's economic performance, but remember, the data is volatile because it's weekly. That's why I look at the four-week moving average instead of just the single week. The report drops every Thursday at 8:30 a.m. ET and can really shake up the markets.
For the week ending February 15, 2025, there were 219,000 initial claims, and about 1.87 million continuing claims for the week ending February 8, 2025. The unemployment rate stood at 4% in January 2025.
How Jobless Claims Affect the Market
Initial claims track emerging unemployment, and continuing claims show those still on benefits, with the latter released a week behind. That's why initial claims often hit the markets harder.
Analysts build their forecasts around estimates of this report. If the actual numbers stray from consensus, markets can shift—usually inversely. Lower initial claims? Expect a rally. Higher? The market might drop.
This report gets heavy coverage for its straightforward logic: a stronger job market means a stronger economy, with more working people boosting disposable income, consumption, and GDP.
Why Jobless Claims Matter to Investors
Markets can react sharply to a mid-month report, especially if it bucks the trend from other indicators. Say other data points to a weakening economy, but claims drop unexpectedly—that could pause selling and lift stocks.
Sometimes it's just because there's no other fresh data around. A good report might even get overlooked on a busy news day.
These claims also feed into models and indicators, like being one of the 10 components in the Conference Board's Leading Indicators Index.
Is Jobless the Same As Unemployed?
Per the Bureau of Labor Statistics, the labor force includes the employed and the unemployed. If you have a job, you're employed. If you're jobless, actively looking, and available, you're unemployed.
What Are the 3 Types of Unemployment?
You'll encounter three types: frictional, which covers voluntary job changes; structural, from economic shifts like tech replacing workers; and cyclical, tied to business cycle downturns.
Can I Collect Unemployment If I Quit My Job?
No, you can't collect if you quit. Voluntary unemployment disqualifies you—benefits are for layoffs, and sometimes firings, but not quits.
The Bottom Line
Jobless claims count weekly filings for unemployment insurance from those without jobs. They're a leading indicator of economic health: rising claims mean a weakening economy, falling ones signal improvement.
Other articles for you
The OECD is an international organization of 37 member countries focused on developing economic and social policies to promote prosperity and well-being.
The free rider problem happens when people benefit from shared resources without paying their fair share, leading to underproduction of those resources.
An investment thesis is a reasoned, research-backed argument for pursuing a specific investment strategy.
Profit is the surplus revenue a company retains after deducting all costs and expenses over a specific period.
The 90/10 strategy by Warren Buffett involves allocating 90% of investments to low-cost S&P 500 index funds and 10% to short-term government bonds for potentially superior long-term returns.
Economic conditions describe the current state of an economy, fluctuating through cycles of expansion and contraction influenced by various indicators.
Vehicle Excise Duty is a UK tax on vehicles based on emissions and history, evolving from road maintenance funds to modern environmental considerations.
Silo mentality refers to the reluctance to share information across departments in a company, leading to reduced efficiency and damaged culture.
The Heckscher-Ohlin model explains how countries benefit from trading based on their abundant resources and production efficiencies.
The National Registration Database is a Canadian electronic system for securities registration that improves efficiency and protects investors.