Labor Department data published Thursday showed another surprise decline in weekly unemployment claims, amid renewed concern that the resilient U.S. economy will stoke inflation pressures and trigger another Federal Reserve rate hike.
As Wall Street remains laser-focused on the job market, around 216,000 people filed new applications for the week ended Sept. 2, the Bureau of Labor Statistics said. The figure compared with the prior tally of 228,000 and it was the lowest level since the final week of January.
The recent four-week average also slipped, to 229,500.
A separate report from the Commerce Department showed unit labor costs for the three months ended in June rose 2.2% from a year earlier, up from an earlier estimate of just 1.2%. The rise came even as productivity fell 1.2%.
https://t.co/wyfH3UuLP0
— Randy Frederick (@RandyAFrederick) September 7, 2023
At just 216k, Initial Jobless Claims came in below the 233k estimate and below last week’s revised 229k level. Claims are now averaging 229k for the past 4 weeks; down 9k from last week. This was the lowest reading since January of this year. pic.twitter.com/fBV9s3Xe4J
Labor-market data remain crucial for markets this week, and indeed into the autumn, following Friday's August payroll report, which showed 187,000 new jobs were created last month.
The report added to recent measures that suggest hiring, while cooling, remains robust enough to add to wage-inflation pressures over the coming months.
Wednesday's final release of the ISM Services index, a key reading of the most important driver of U.S. economic growth, showed not only stronger-than-expected overall activity but also a big jump in the employment index, which usually means a corresponding rise in near-term hiring.
Benchmark 10-year Treasury bond yields spiked higher on the data release, and traded near the highest levels in a month, while 2-year note yields surged past 5% as traders renewed bets on a November rate hike.
However, the resumption of student loan payments next month will likely act as a drag on spending, and other hiring benchmarks, including that from the National Federation of Independent Businesses, suggest flatter jobs gains over the final months of the year.
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