Jobless Claims

Updated March 10, 2021

Jobless Claims 

What Does Jobless Claims Mean? 

Jobless claims is a measure of the number of individuals who filed for state unemployment benefits. It is an important indicator of how many people are unemployed at a point in time. The meaning of jobless claims can vary as it refers to two separate statistics: initial jobless claims and continuing jobless claims.

Initial Jobless Claims 

Initial jobless claims refer to people filing for unemployment benefits for the first time.

Continuing Jobless Claims 

Continuing jobless claims refers to people who are filing for unemployment benefits after already filing for two or more consecutive weeks.

How Are Jobless Claims Calculated? 

The Department of Labor keeps track of the number of people filing for unemployment benefits in each state. The total number of jobless claims are added up and compared against numbers from the previous week.

Who Reports Jobless Claims? 

Jobless claims are reported by the US Department of Labor on a weekly basis. The reports include data for the previous week (ending on the prior Saturday) and are released every Thursday at 8:30am ET.

Where to Find Jobless Claims Reports

The jobless claims reports can be found on the Department of Labor website. The following chart highlights initial jobless claims from February 2020 to February 2021.

How Jobless Claims Affect The Economy

Jobless claims are used to gauge the overall state of the labor market and are an important macroeconomic indicator. If fewer people are working, there is less disposable income and reduced consumption (which could lead to a lower GDP). Additionally, the government must spend more money to fund unemployment benefits, contributing to a higher budget deficit.

From week-to-week, analysts and policymakers review the volume of jobless claims – as well as the ratio of initial claims to continuing claims – to gauge the direction of the unemployment rate and the overall health of the economy. Generally speaking, initial jobless claims tend to rise prior to a recession and typically decline as the economy begins to recover.

Why Investors Should Care About Jobless Claims 

Beyond the macroeconomic implications, jobless claims can affect both institutional and retail investors. Since the jobless claims report is used to gauge the state of the labor market (and is an indicator of the overall economy), a major increase or decrease can lead to shifts in stock market activity. 

For example, a sharp increase in jobless claims could suggest that unemployment is rising, which may reduce investor confidence and lead to selloffs. On the other hand, a surprise decline in jobless claims could hint at a promising economic outlook, which may inspire confidence and increase stock prices.

Much like company earnings reports, the market reaction to jobless claims reports is often more closely related to expectations, rather than actual numbers. Instead, investors tend to be more concerned about the deviation from the expected number. That said, it isn’t uncommon for jobless claims reports to have little effect on the market, especially if there is other major news dominating the news cycle.

 

Ask an Expert
All of our content is verified for accuracy by Rachel Siegel, CFA and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Jobless Claims.

Ask An Expert About  Jobless Claims

How Can I File a Jobless Claim?

Filing a jobless claim will vary depending on the state you live in. Start by contacting the unemployment insurance program in the state where you worked. A representative will walk you through the process and let you know which information to provide.

How Many Jobless Claims Were Made in 2008? 

There were 21.7 million initial jobless claims made in 2008. However, this doesn’t account for continued jobless claims. It’s also important to note that the full effects of the 2008 financial crisis were not felt until 2009. Initial joblessness in 2009 was as high as 29.8 million.

How Many Jobless Claims Were Made in 2020? 

There were over 75 million initial jobless claims made in 2020. However, this doesn't account for continued jobless claims.

Rachel Siegel, CFA
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Rachel Siegel, CFA is one of the nation's leading experts at ensuring the accuracy of financial and economic text.  Her prestigious background includes over 10 years of experience in creating professional financial certification exams and another 20 years of college-level teaching.

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