uploads///US Initial Jobless Claims

Strength in Initial Jobless Claims Is Positive for Restaurants

By

Dec. 4 2020, Updated 10:53 a.m. ET

Initial jobless claims

Initial jobless claims can help us gauge the health of the US labor market. It indicates the number of people filing for unemployment. Naturally, if fewer people are filing for this claim, then more people are employed.

The U.S. Department of Labor issues jobless claims data weekly. For the week ending June 25, 2015, it rose by 3,000 to 271,000. This was right in the consensus range of 270,000 and 275,000. This number indicates the low layoff in the market. In the above chart you can see that the four-week moving average for jobless claims has trended downwards since 2010. This indicates growing strength in the US labor market. It’s positive for restaurants.

For 16 straight weeks, jobless claims came in below 300,000 levels. Usually, claims below 300,000 levels mean strength in the job market.

Article continues below advertisement

How can this data help restaurant investors?

The jobless claims indicate a tight labor market. This could put pressure on wages. Restaurant investors should keep a close eye on the cost line items of their respective restaurant stocks. This also impacts the Consumer Discretionary Select Sector SPDR Fund ETF (XLY). XLY holds ~1% of Chipotle Mexican Grill (CMG), 0.3% of Darden (DRI), 3% of Starbucks (SBUX), and 1.5% of Yum! Brands (YUM).

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.