Initial Claims

Categories: Econ

This is a weekly report that’s been around since the mid-60s, which summarizes the volume of claims filed for people aiming to get some form of jobless benefits, how many qualify, and how many are receiving jobless benefits.

When initial claims are high, it means people are looking for help, because the economy’s sponge isn’t soaking up their labor like it should be (ideally).

Initial claims is the domain of the U.S. Department of Labor, officially called the Unemployment Insurance Weekly Claims Report. Since the weekly report can have a lot of changes, analysts often use month-long moving averages when searching for upward or downward sloping trends.

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Finance: What is the Unemployment Rate?15 Views

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finance a la shmoop what is the unemployment rate so negative like

00:09

shouldn't it be the employment rate at least that way we'd have a bigger number

00:13

and bigger is better in the u.s. right well anyway the unemployment rate in

00:16

this country is tracked carefully because it's one of the Canaries in the

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mine shaft giving us an early heads-up on the direction of the economy well [canary hopping in cage in mineshaft]

00:25

jobs are generally highly volatile in a given range and the government copiously

00:29

inspects this data as it affects so many other things principally the costs of

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renting money has set out by the Fed because high employment stimulates

00:38

inflation and low does the opposite well the government's gonna ask is the

00:42

unemployment rate shrinking too fast I eat everyone's getting jobs well if so [government officials in conference]

00:47

then beware inflation is coming which historically has motivated the Fed to

00:52

raise interest rates in response or constrict the supply of cash out there

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and the opposite is true as well one of the big cocktail party conflicts and if

01:01

you find yourself at a cocktail party debating this notion make like the

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Jordan Peele movie and get out but if you can't and you must debate well there

01:09

is a quote natural rate unquote of unemployment of around five or six

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percent yeah zero percent unemployment ain't never

01:16

gonna happen generally the higher the unemployment rate the worse shape the

01:20

economy is in but remember the unemployment rate doesn't tell the whole

01:24

story the government can help create a bunch of temporary or low-paying jobs

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too cosmetically raise the employment rate in the short term like ahead of an [happy government officials in conference]

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election but the quality of those jobs is probably not great like think temp

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workers at the DMV well after a while of longer term unemployment some people [long line at the DMV]

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will just give up hunting for jobs and if they don't even go on indeed or

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Glassdoor looking for work so they're kind of permanently in the unemployment

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numbers so the unemployment rate might seem to be a bit less dire in that case [unemployed people holding up cardboard signs]

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but in fact well there might still be a lot of people who needed jobs out there

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we don't know we're just looking for some numbers to help us direct

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understanding of where the economy has gone and help us then tweak things so

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interest rates are optimized at the inflation numbers that we want to hit

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got it not everyone is qualified to stick that thing on the back of your

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license plate that shows you red yeah a whole lot of government workers I [hand adds stickers on back of license place]

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guess do that now bad times

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