# Jobless Claims and the Market: Why They Matter

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## What Are Jobless Claims?

Jobless claims are a statistic reported weekly by the U.S. Department of Labor that counts people filing to receive [unemployment](https://www.investopedia.com/terms/u/unemployment.asp) insurance benefits. There are two categories of jobless claims: initial, which comprises people filing for the first time, and continuing, which consists of unemployed people who have already been receiving unemployment benefits. Jobless claims are an important [leading indicator](https://www.investopedia.com/terms/l/leadingindicator.asp) of the state of the employment situation and the health of the economy.

### Key Takeaways

*   Jobless claims measure how many people are out of work at a given time.
*   Initial jobless claims represent new claimants for unemployment benefits.
*   Continuing jobless claims are people who are continuing to receive benefits.
*   It is generally a poor sign for the economy when a growing number of people who are willing to work can't find jobs.
*   Because weekly jobless claims can be very volatile, many economists monitor the moving four-week average.  
    

## Understanding Jobless Claims

The nation's jobless claims are an extremely important indicator for macroeconomic analysis. A weekly report produced and published by the [Department of Labor (DOL)](https://www.investopedia.com/terms/d/dol.asp) tracks how many new people filed for [unemployment benefits](https://www.investopedia.com/terms/u/unemployment-compensation.asp) in the previous week. As such, it is a good gauge of the U.S. job market. For instance, when more people file for unemployment benefits, it generally means fewer people have jobs, and vice versa.

Investors can use this report to form an opinion of the country's economic performance. However, it is often very volatile data because it is reported every week. The moving four-week average of jobless claims is often monitored rather than the weekly figure. The report is released Thursday mornings at 8:30 a.m. ET and can be a market-moving event.

There were 219,000 initial jobless claims filed in the week ending Feb. 15, 2025, and about 1.87 million continuing claims during the week ending Feb. 8, 2025. The unemployment rate was 4% as of January 2025.  

## How Jobless Claims Affect the Market

As mentioned, the initial jobless claims measure emerging unemployment and the continued claims data measure the number of people still claiming unemployment benefits. The continued claims data is released one week later than the initial claims. For this reason, the initial claims usually have a higher impact on the financial markets.

Many financial analysts incorporate estimates of the report into their market forecast. If a weekly release on jobless claims comes insignificantly different than consensus estimates, this can move the markets higher or lower. Generally, the move is the inverse of the report. If initial jobless claims are down, the market will often rally upwards. If the initial jobless claims are up, the market may slump.

The Initial Jobless Claims Report gets a lot of press due to its simplicity and the basic assumption that the healthier the job market, the healthier the economy. That is, more people working means more [disposable income](https://www.investopedia.com/terms/d/disposableincome.asp) in the economy, which leads to higher personal consumption and [gross domestic product (GDP)](https://www.investopedia.com/terms/g/gdp.asp).

## Why Jobless Claims Matter to Investors

Markets may react strongly to a mid-month jobless claims report, particularly if it shows a difference from the cumulative evidence of other recent indicators. For instance, if other indicators show a weakening economy, a surprise drop in jobless claims could slow down equity sellers and could actually lift stocks.

Sometimes this happens simply because there isn't any other recent data to chew on at the time. A favorable initial jobless claims report may also get lost in the shuffle of a busy news day and hardly be noticed by Wall Street.

Jobless claims are also used as inputs for the creation of models and indicators. For example, average weekly initial jobless claims are one of the 10 components of the Conference Board's [Composite Index of Leading Indicators](https://www.investopedia.com/terms/c/cili.asp).

## Is Jobless the Same As Unemployed?

According to the Bureau of Labor Statistics, the labor force is made up of the employed and the unemployed. Those who have jobs are employed. Those who are jobless, looking for a job, and available for work, are unemployed.

## What Are the 3 Types of Unemployment?

The three types of unemployment are frictional (voluntary changes in employment), structural (changes in the structure of an economy, such as technology replacing workers), and cyclical (those jobs that are lost due to changes in the business cycle.)

## Can I Collect Unemployment If I Quit My Job?

No, you cannot collect unemployment if you quit your job. Any voluntary unemployment is not eligible for unemployment benefits. This means you are only eligible for unemployment benefits if you are laid off, and in certain cases, if you are fired.

## The Bottom Line

Jobless claims are the number of people filing weekly to receive unemployment insurance due to not having a job. It is an important leading indicator of the health of the economy. If jobless claims are growing, it signals a weakening economy. Conversely, if jobless claims are decreasing, it signals an improving economy.

> **Article Sources**
>
> 1.  U.S. Department of Labor. "[Unemployment Insurance Weekly Claims](https://www.dol.gov/ui/data.pdf)," Page 1.
>     
> 2.  U.S. Bureau of Labor Statistics. "[The Employment Situation](https://www.bls.gov/news.release/pdf/empsit.pdf)."
>     
> 3.  U.S. Department of Labor. "[Unemployment Insurance Weekly Claims](https://www.dol.gov/ui/data.pdf)," Pages 4 & 9.
>     
> 4.  The Conference Board. "[Global Business Cycle Indicators](https://www.conference-board.org/data/bcicountry.cfm?cid=1)."
>     
> 5.  U.S. Bureau of Labor Statistics. “[How the Government Measures Unemployment](https://www.bls.gov/cps/cps_htgm.htm)," Select "What are the basic concepts of employment and unemployment?"
>     
> 6.  U.S. Department of Labor. "[Unemployment Insurance Program Fact Sheet](https://oui.doleta.gov/unemploy/docs/factsheet/UI_Program_FactSheet.pdf)," Page 1.