US initial jobless claims 197K v 201K expected
Prior 196K (revised to 198K)
Continuing claims 1719K v 1745K expected Prior 1730K (revised to 1717K)
Claims remain at historically low levels, indicating that layoffs remain contained, suggests that the US labor market remains healthy and the Fed can continue to focus on inflation.
The reaction in the markets has been fairly muted as the strength in jobless claims doesn’t change the current outlook. The markets already know that the US labour market is stable, so only a deterioration would change those expectations.
The US PMIs have also highlighted the resilience in the labor market yesterday.
S&P Global said employment rose sharply in September, with job creation reaching its fastest pace in more than four years, since June 2022. The increase was broad-based across both manufacturing and services, as companies hired more workers to deal with stronger demand and rising backlogs.
Traders are pricing a 70% chance of a Fed rate hike in October, with some chances of another one following up in December. The markets see at least three more rate hike coming by the end of 2027.