Initial jobless claims for the week ending September 2 decreased by 13,000 to 216,000 (consensus 233,000).
Continuing jobless claims for the week ending August 26 decreased by 40,000 to 1.679 million.
The key takeaway from the report is that initial claims — a leading indicator — were at their lowest level since February. That is really good news — economically speaking — but it is also news — monetary policy speaking — that will likely keep the Fed in a restrictive policy position for longer.
The revised Q2 productivity report featured a downward revision in productivity to 3.5% (consensus 3.7%) from the preliminary estimate of 3.7% and an upward revision in unit labor costs to 2.2% (consensus 1.6%) from the preliminary estimate of 1.6%.
The key takeaway from the report is that unit labor costs weren’t as low as previously reported, so they look disappointing at the headline level; however, they still fit the bill of disinflation given that unit labor costs were up 2.5% a year ago.
Treasuries saw some turbulent action following the data.
The 2-yr note yield, at 4.99% just before the release, hit 5.05% in the immediate aftermath before pulling back to 5.02%. The 10-yr note yield was at 4.27% before the data, hit 4.31% immediately after, but pulled back to 4.28%.