Yahoo Finance Declining Jobless Claims Fuel Consumer Firms like CarMax and Macy’s
Good News for US Consumer, Industrial, and Russia Investors (Part 1 of 3)
Retailers gain as jobless claims decline in the US
The initial jobless claims report for the week ending March 28 brought good news for investors in consumer sector firms and ETFs—like the Consumer Discretionary Select Sector SPDR ETF (XLY). XLY was up 0.89% on April 2. CarMax (KMX) is a retail sector firm. It was up 9.27%. Expedia (EXPE) gained 4.05%. Macy’s (M) climbed 3.67%.
Declining jobless claims benefit the Consumer Discretionary sector
Investors in the Consumer Discretionary sector are among the first to gain due to positive reports from the US labor market. Initial jobless claims show the number of individuals who have filed for unemployment insurance for the first time. The U.S. Department of Labor’s Employment and Training Administration comes out with this weekly report. The report is a good indicator for labor market conditions in the US (SPY) (IVV). A decrease in jobless claims bodes well for the labor market. It’s also good for the economy’s general well-being. It boosts consumer spending.
The above chart shows the trend in initial jobless claims and XLY’s price movement. Since the 2009 recession, the US economy saw a declining trend in unemployment insurance claims. As a result, it saw a gain in consumer spending. This is reflected in XLY. It’s trending upward.
Jobless claims were at 268,000
For the week ending March 28, there were 268,000 new claims for unemployment insurance—according to a U.S. Department of Labor report released on Thursday, April 2. The figure came in way below the median estimate of about 286,000 claims. Also, it was down from the previous week’s claim figure of 288,000.
In the US, applications for unemployment benefits dropped by 20,000 for the week ending March 28. This marked the second lowest amount in almost 15 years. Employers seem to be more upbeat about the economy.
In the US, the labor market definitely strengthened over time. However, the manufacturing sector continues to show weakness. Read US industrial production slows down in February for better insight into the state of the manufacturing sector in the US.
The April 2 Factory Orders Report for February had a positive surprise for investors in the US industrial sector. Let’s take a look.
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