US Jobless Claims Data Near Historic Lows
Market Malleable Metal: What Shapes the Price of Gold?
Initial jobless claims report
The initial jobless claims report shows the number of people filing for unemployment benefits in the United States. It is compiled weekly by the US Department of Labor. Weekly claims figures are a measure of the labor market’s strength. Since weekly data could have statistical noise, the four-week average of jobless claims is often preferred by analysts.
Average jobless claims near a 15-year low
According to the labor report released on May 14, initial jobless claims for the week ending May 9 decreased by 1,000 to a seasonally adjusted 264,000. This was below expectations of 273,000. The four-week moving average was 271,750—the lowest level since April 2000. The number fell by 7,750 week-over-week.
These data show the labor market is relatively strong despite otherwise modest economic growth in the US. Generally, jobless claims have been on a downtrend since February.
Jobs data impact gold investors
Labor market strength is positive for the economy and the US dollar.
The Fed watches jobs data closely. Any sustained improvement on this front may lead the Fed to increase interest rates earlier than expected. This information impacts gold-backed ETFs including the SPDR Gold Trust (GLD).
Other investments affected by US labour market data include Eldorado Gold (EGO), Gold Fields (GFI), Newmont Mining (NEM), and Yamana Gold (AUY). Because it invests in these stocks, the Market Vectors Gold Miners ETF (GDX) is also affected by jobs data. Together, Newmont Mining and Yamana Gold account for 10.1% of GDX’s holdings.
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