Initial claims are a measure of the number of new filings for unemployment benefits reported by individuals who have recently been laid off and are entering the state’s unemployment insurance system.

They are an early indicator, often referred to as a “leading” economic indicator because they give the first signal about the state of the economy and the job market.

The number of initial claims is a proxy for layoffs and a direct reflection of the current state of economic health.

Rising initial claims indicate that businesses are cutting down their workforce in response to poor sales, reduced production, or company restructuring. A decrease in initial claims, on the other hand, suggests economic robustness and job market strength.

Recession Signal

A sustained trend in rising initial claims points towards a softening labor market and potentially a weakening economy.

When businesses expect reduced growth or demand, they may reduce their labor force as a cost-cutting measure, which is reflected in the number of initial claims.

Track this yourself

You can find initial claims on TradingView, here: https://www.tradingview.com/chart/v7ZG3yMA/?symbol=FRED%3AICSA