Initial Jobless Claims report
The Initial Jobless Claims report shows the number of people filing for unemployment benefits for the first time in the United States. It’s compiled weekly by the U.S. Department of Labor. The report is a good indicator of labor market conditions in the United States (SPY) (IVV).
Jobless claims fall
According to the Initial Jobless Claims report released on June 18, claims for the week ending June 13 fell by 12,000 week-over-week to a seasonally adjusted 267,000. This was below consensus expectations of 275,000 claims. The four-week moving average was 276,750. The number fell by 2,000 week-over-week. Since weekly data could have statistical noise, analysts often prefer the four-week average for jobless claims.
This is in line with the Federal Reserve’s observation of improving labor markets.
Jobs data and gold investors
Weekly claims figures are a measure of the labor market’s strength. Falling jobless claims bode well for consumer spending, as increased jobs lead to more wages.
The Fed is also closely watching the jobs data. Any sustained improvement on this front may lead the Fed to increase interest rates earlier than expected. This information impacts gold-backed ETFs such as the SPDR Gold Trust (GLD).
Other investments affected by US labor market data include Eldorado Gold (EGO), Gold Fields (GFI), Newmont Mining (NEM), and Yamana Gold (AUY). Since the VanEck Vectors Gold Miners ETF (GDX) invests in these stocks, it’s also affected by jobs data. Together, Newmont Mining and Yamana Gold account for 10.1% of GDX’s holdings.