Back to top

Real Time Insight


Now that the Federal Reserve has telegraphed a target for employment in the U.S., traders are paying close attention to all the gauges that help measure the health and trends of employment here in the states.

Part of that process is the analysis of the weekly unemployment claims.   Even though these readings tend to be volatile, they can offer insight into current trends and the outcome of both the ADP and BLS reports which are published each month.

This week’s unemployment claims jumped to 361,000 from 343,000 last week.   Expectations were for 358,000 claims to be filed.  Last week’s number was revised slightly higher to 344,000.

Since claims spiked in early November mostly attributed to Sandy, they have been trending lower until this week. 

The good news is that the four-week average of claims fell 13,750 to 367,750, a two-month low.   Many traders and economists use the four-week average to “smooth” out the volatility and better identify trends.

Continuing claims in the week ending Dec. 8 rose 12,000 to 3.22 million.

Is this good enough?

Weekly unemployment claims are certainly not the end-all, be-all when gauging the health of the U.S. Labor Market, but I’m wondering if the mid to high 300k range is enough?

There is no doubt a correlation between unemployment claims and the unemployment rate as demponstrated in the graphs below:

In the late 90’s into 2001, weekly unemployment claims were down in the high 200s to low 300s on average; at the same time unemployment was just over 4%.

From 2004 to 2008, the weekly readings were generally below 320k, during which time unemployment dropped from just over 6% to 4.5%.

Given the stubbornly high current rate of unemployment, I would think that unemployment claims should be averaging 300-320k, not the higher numbers that we have been averaging over the past couple of years.

Unemployment is inching lower, but the participation rate is also dropping, skewing that number lower.

Many say anything under 400k is a good number, but what do you think?

I;m curious to get everyone’s opinion on what a “satisfactory” weekly jobs claims number should be (to get the unemployment rate back below 6.5%), I’ll make it easy and give some basic ranges:

1.Anywhere under 400k is OK

2.The current readings of mid to high 300s

3.We should be seeing readings in the very low 300s

4.To get real unemployment down, we need claims at 300k or less

Let me know your thoughts!

(I’d vote for 3 myself)

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%