1/ Employment is viewed as a lagging economic indicator except for when laid off workers seek financial help; that's when this labor activity becomes a leading indicator.
Enter #joblessclaims.
Our latest primer thread incoming ⤵
Enter #joblessclaims.
Our latest primer thread incoming ⤵
2/ What is "jobless claims?"
Its fancy name is Unemployment Insurance Weekly Claims and it's a data series about the need for financial help for laid off workers.
The Department of Labor aggregates state-level input and publishes the data every Thursday for the prior week.
Its fancy name is Unemployment Insurance Weekly Claims and it's a data series about the need for financial help for laid off workers.
The Department of Labor aggregates state-level input and publishes the data every Thursday for the prior week.
3/ Why do markets care about jobless claims?
1. It *can* signal demand for labor.
2. It's a higher frequency data set--weekly.
3. Initial claims warn of shocks; continuing claims, drag.
4. It's a leading economic indicator.
1. It *can* signal demand for labor.
2. It's a higher frequency data set--weekly.
3. Initial claims warn of shocks; continuing claims, drag.
4. It's a leading economic indicator.
4/ "Jobless claims" is often digested and discussed in two statistics at the national level: 1) seasonally adjusted initial claims; and 2) seasonally adjusted continuing claims.
There are 17 metrics released; along w/ data for 50 states, Puerto Rico, and the Virgin Islands.
There are 17 metrics released; along w/ data for 50 states, Puerto Rico, and the Virgin Islands.
5/ Let's breakdown each Initial Claims and Continuing Claims with a few pictures for our visual learners.
🎁 Bonus content: a few controversies (or maybe idiosyncrasies?) and the oft-overlooked state-level commentary.
🎁 Bonus content: a few controversies (or maybe idiosyncrasies?) and the oft-overlooked state-level commentary.
6/ Initial Claims is defined by "a claim filed by an unemployed individual after a separation from an employer." The unemployed individual files with their state of residence (regardless of where the employer is domiciled). 
7/ Continuing Claims is also known as "Insured Unemployment" and is defined by "an unemployed person who has already filed an initial claim" and continues to need financial help. Again, states administer these claims.
8/ To Seasonally Adjust or Not, that is the question.
Look, we're firmly in Team Not Seasonally Adjusted whenever we can make the choice. We remove the seasonality by calculating a rolling average.
Why? The same reason we like preservative-free food; it's pure(er).
Look, we're firmly in Team Not Seasonally Adjusted whenever we can make the choice. We remove the seasonality by calculating a rolling average.
Why? The same reason we like preservative-free food; it's pure(er).
9/ So let's chat a few idiosyncrasies about jobless claims: one is rooted in methodology, another in eligibility.
1st... Methodology: initial advance claims are reported in the state where the claim is liable, not the residence of the unemployed person.
1st... Methodology: initial advance claims are reported in the state where the claim is liable, not the residence of the unemployed person.
10/ How claims are classified by state can send false signals about the health of the local labor economy.
Ex. If a global headquarters of a company resides in IL but the manufacturing layoffs are in KY. The claims will initially show up in IL, but the reality sits in KY.
Ex. If a global headquarters of a company resides in IL but the manufacturing layoffs are in KY. The claims will initially show up in IL, but the reality sits in KY.
11/ 2nd... Eligibility: each state has their own set of rules about how long benefits are provided.
Here's the crux: jobless claims could appear low if the unemployed person is UNABLE to file a claim because they exhausted their benefits.
oui.doleta.gov/unemploy/state…
Here's the crux: jobless claims could appear low if the unemployed person is UNABLE to file a claim because they exhausted their benefits.
oui.doleta.gov/unemploy/state…
12/ Near the end of the jobless claims release is a handy page of state supplied commentaries about why claims are higher or lower. Though not required, the commentary is useful when they do because it'll indicate which industries were affected.
👀 dol.gov/ui/data.pdf
👀 dol.gov/ui/data.pdf
13/ Recap ⤵
1. "Jobless claims" matters because it's a leading indicator and markets like early signals.
2. It measures two things about the labor economy: labor shocks (initial claims) and drags (continuing claims).
Read more: oui.doleta.gov/unemploy/
1. "Jobless claims" matters because it's a leading indicator and markets like early signals.
2. It measures two things about the labor economy: labor shocks (initial claims) and drags (continuing claims).
Read more: oui.doleta.gov/unemploy/
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