Release Explanation: This report provides the number of people claiming new unemployment benefits and the number of people who are continuing to claim unemployment benefits. Both metrics are provided in weekly and in 4-week moving average form. Very important that economic forecasts are based on the labor market. Economic strength builds from the willingness/confidence of firms to hire, without a strong labor market growth is hard to achieve. Over time the Employment Data will affect all economic releases, it does however take time for labor trends to form. A currency will strengthen or weaken in-line with the other releases that the Employment Data impacts, rather than as a knee-jerk reaction to these numbers printing. Economists tend to look more at the 4-week numbers because weekly numbers can be volatile although the market reacts to the headline numbers initially.
Trade Desk Thoughts: Claims for new unemployment benefits increased to 524,000 last week, the Labor Department said today, an increase of 54,000 from last week's revised number of 470,000. The 4-week moving average was of initial claims was 518,500, a decrease of 8,000 from the previous week's revised average of 526,500.
The insured unemployment rate remained unchanged at 3.4%.
The number of workers who were continuing to claim benefits was 4,497,000, a decrease of 115,000 from the preceding week's revised level of 4,612,000. The 4-week moving average of continuing claims was 4,497,750, an increase of 27,500 from the preceding week's revised average of 4,470,250.
New York state reported the largest increase in new claims the week of Jan. 3, at 24,465, due to layoffs in the construction, service, and transportation industries. California reported the biggest decrease, at 14,796, because of fewer layoffs in the construction and service industries.
Forex Technical Reaction: S&P futures rose after the report but still remained about 3 points lower on the day. The dollar gained after the ECB announcement, but declined after the report on unemployment claims was released.