Thursday, April 07, 2011

Unemployment, Jobless Claims, and other Financial Terms

Yesterday Astronology had a fabulous rundown of financial terms you might want to learn before talking to a CFO. I have a Masters in International Economics and Finance but even I need some help sometimes with understanding what certain financial terms mean. My favorite site to use as a refresher for financial terms is Investopedia which is basically a dictionary of financial terms.

One term that has been thrown around the news the past few years is "unemployment". But what type of person actually qualifies as "unemployed"? Is it the guy who is not searching for a job? Is it the woman who has been out of work two years? Who qualifies? Well, according to Investopedia: "Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force." If you want to find out more about unemployment and how it is calculated in the United States, follow that link above.

What about jobless claims? This morning the financial world was abuzz with news that initial jobless claims fell 10,000 last week. Investopedia explains: "The number of people who are filing or have filed to receive unemployment insurance benefits, as reported weekly by the U.S. Department of Labor. There are two categories of jobless claims - initial, which comprises people filing for the first time, and continuing, which consists of unemployed people who have been receiving unemployment benefits for a while. Jobless claims are an important leading indicator on the state of the employment situation and the health of the economy. Average weekly initial jobless claims are one of the 10 components of The Conference Board Leading Economic Index."

Again, taking these terms at their base level can be confusing or misleading but actually researching them can lead to a better understanding of the job market and about your current position. If you ever don't understand something, make sure to raise your hand and ask, because trust me, even people with Masters in the subject can sometimes use a refresher. 

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