What is it?
In the Weekly Jobless Claims report, the US Department of Labor reports the number of people filing claims for state unemployment insurance for the first time. The reported figures are usually the gross jobless claims number, along with the difference between the reported number and that of the week prior. The data is very timely, as it is from the week prior to the report's release. This timeliness - combined with the fact that it is considered a relatively good labor market indicator - causes the report to often move financial markets, particularly if the results are significantly different than analysts' expectations.
Though the report is timely, it is also volatile. The numbers are often revised, sometimes significantly. Because of this volatility, a four-week running average is used to smooth out the results in order to track trends in the data. It is generally accepted that fewer than 350,000 reported claims translates into net job creation.
The results can be a double-edged sword. Dropping claims indicates a strengthening job market, which is good for stock markets. However, the bond markets prefer slower, measured growth. If the job market strengthens quickly, inflation fears arise, along with fears of interest rate increases. Further, if the job market strengthens quickly enough to strain the supply of workers, then fears of wage inflation are enhanced even further.
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