November 2008 US Unemployment Claims
November 19th, 2008 Posted in Indicator Reports
U.S. Unemployment Claims, also known as Jobless Claims, is a survey used to measure the number of individuals who filed for unemployment insurance for the first time during the past week within the United States. It is released on a weekly basis, about 5 days after the week ends. Every state in the U.S offers jobless insurance programs that must conform to rules set down by federal law. The Labor Department in Washington D.C. then gathers all the data submitted by each state and releases the updated figures to the public on the following Thursday.
The number of unemployed individuals is an important gauge of general economic health because employed citizens are more likely spend and, therefore, more likely to increase total consumer spending.
If the Survey Comes Inline with Market Forecasts
Expectations for this month are suggesting that the U.S. Unemployment Claims will decrease this week from 516K to 508K. It is no secret that the global financial picture is currently standing before a significant crossroad that is liable to have a profound impact on the upcoming year. However, one should not only consider the economic interpretation of the indicator, but also look from the psychological point of view. In times when equity markets all over the world are experiencing sharp losses, investors are finding themselves in a fragile state of mind, which in turn provides markets with extreme volatility. Data is expected to indicate that after 4 consecutive weeks of increasing levels of unemployed people, the U.S. economy may actually see its first decrease in the number of people filing for unemployment insurance, which could trigger a bullish ripple upon USD crosses. If all stays in line with market forecasts, or even surprises with a lower-than-forecasted decrease, the EUR/USD pair may continue to fall towards the 1.2200 level.
If the Survey Will Surprise with the Opposite
When the actual figure is higher than forecasted, traders are likely to see the USD depreciating against its currency pairs and crosses. After a series of negative data from this exact survey, another week of similar results may weaken the greenback to a point of a reversal against the EUR. The U.S. economy might struggle from what could be a long-lasting depression, and a negative figure will surely not help to ease some of the growing concerns seen lately. In this case, investors will feel somewhat less secure when dispersing funds in U.S. industries. As a result, this may in fact generate a correction to the current bullish trend in the USD. This scenario could get the EUR/USD to break its recent bullish run and move back towards of 1.2850.
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