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Initial Jobless Claims Remained Steady: What Does It Mean?

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Initial jobless claims

The U.S. Department of Labor released its weekly statistics for initial jobless claims for the week ending November 7, 2015. The initial jobless claims were 276,000. It didn’t change from the previous week. The estimation after the recent fall in the unemployment rate was that the initial claims would fall to 269,000 claims. However, the unchanged claims have remained below the threshold of 300,000 claims for quite some time. This has been positive news from the labor market. The four-week moving average rose by 5,000 to reach 267,750 claims. Let’s a look at the initial jobless claims on a YTD (year-to-date) basis.

As you can see in the above chart, the initial jobless claims have been trending downwards. This is a positive sign. After the recent strong labor data released for October, this report was important.

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What do falling initial claims signify?

The initial claims report is released by the U.S. Department of Labor every week. It provides information about the number of first-time applications for benefits offered by the US states for people without jobs. The market sees this as an important indicator for the future of the economy. A falling trend indicates a strengthening job market.

The US retail sector is also affected by the falling initial claims. It impacts consumer confidence and consumer spending patterns. As a result, the consumer discretionary sector of retail (XRT)(FDIS) had a high negative correlation with the initial jobless claims.

The falling initial jobless claims should send positive signals to retailers like Macy’s (M), Kohl’s (KSS), L Brands (LB), and Nordstrom (JWN).

In the next part, we’ll a look at the continuing claims.

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