What Falling Unemployment Claims Mean for the US Economy

The Conference Board uses the average weekly unemployment claims as a key constituent of its LEI (Leading Economic Index). An optimal level of employment is one of the key ingredients for a healthy economy, and rising unemployment is a red flag for the economy and could eventually lead to a recession. The Conference Board thus uses weekly claims data (instead of monthly non-farm payrolls) because weekly claims, when adjusted for seasonality, can provide a more accurate account of the underlying economic conditions.