The previous four weeks of initial unemployment claims have delivered results near the 12-month average of 225,000. Meanwhile, the consensus estimate expects the trend to remain in this Thursday’s print. Against this backdrop, investors are worried about labor market softening, considering that economic performance is decelerating and government spending reductions have led to wide-ranging layoffs in the public sector. But due to severance packages, those folks haven’t filed for unemployment payments in aggregate, limiting a potential increase in claims. The dynamic informs my opinion that filings are likely to climb at some point this year, but in the short-term, I see no reason to expect a sizeable decline in benefit requests. These conditions compel me to look at the ForecastTrader Contract with a 210,000 threshold for initial unemployment claims, a level that the headline figure exceeded in all but five of the last 57 weeks.
The IBKR ForecastTrader question asking, “Will US Initial Jobless Claims exceed 210,000 for the week ending March 29, 2025,” offers the “Yes” answer at what I believe is an attractive $0.83, pointing to 83% odds that the report arrives ahead of 210,000. I like the “Yes” here, because a significant drop is unlikely in my view, while an uptick is in the cards.
Source: ForecastEx
Note: Prices are highest bids as of the morning of April 1, 2025.
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Disclosure: CFTC Regulation 1.71
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