The U.S. weekly jobless claims increased marginally last week, signaling low layoff levels. Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 230,000 for the week ending on September 7. Last week’s data included the Labor Day holiday and claims tend to be volatile around public holidays. However, they have been steady since dropping from an 11-month high of 250,000 in late July.
Unadjusted U.S. weekly jobless claims decreased by 12,968 to 177,663 last week, led by substantial declines in California, Georgia, Michigan, Ohio and New York.
A decline in hiring due to higher borrowing costs curbing demand has raised labor market slowdown concerns. Government data last week revealed that non-farm payrolls increased by less than expected in August but the unemployment rate fell to 4.2 percent from 4.3 percent in July. Therefore, the drop in U.S. weekly jobless claims claims throughout August is consistent with the decline in the unemployment rate last month.
Other data from the Department of Labor on Thursday revealed that producer prices rose slightly more than expected in August amid a rebound in service costs.
Read: Japan’s wholesale inflation slows to 2.5 percent in August, easing BOJ price concerns
Fed’s rate cut bets
The relatively stable labor market and high inflation further diminished the chances of the Federal Reserve cutting interest rates by 50 basis points next week when the U.S. central bank will likely start its easing cycle.
The Federal Reserve has maintained its benchmark overnight interest rate in the current 5.25-5.50 percent range for a year after raising it by 525 basis points in 2022 and 2023.
Financial markets priced in a 13 percent chance of a 50-basis-point rate cut at the Fed’s next policy meeting and an 87 percent chance of a 25-basis-point rate reduction, according to CME Group’s FedWatch Tool.
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