Low US jobless claims point to stable labour market
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The news: The number of Americans filing for jobless claims fell by a more-than-expected 5,000 to 227,000 last week, according to the Labor Department.
The numbers: Continuing claims also dropped to 1.838 million, the lowest since mid-June, reflecting a resilient job market despite recent concerns about rising unemployment. Economists polled by Reuters had forecast 230,000 claims.
A separate report from ADP Research Institute showed private payrolls increased by 99,000 jobs in August, the smallest gain since 2021, with hiring slowing in sectors like manufacturing and professional services.
It also showed wage growth remained flat compared to a year ago at 4.8% for those who stayed in their current position and 7.3% for job changers. Job additions were strongest in construction and health services.
The context: The data comes ahead of the key non-farm payrolls report on Friday, which is expected to show an increase of 160,000 jobs in August, according to a Reuters poll. The unemployment rate is expected to slip to 4.2% from 4.3% in July.
The data is expected to weigh heavily on the Federal Reserve's interest rate decision, with a rate cut anticipated at its next meeting on 18 September.
What they said: “After today’s mixed numbers, it’s up to tomorrow’s jobs report to give investors a clearer read on the state of the labor market,” Chris Larkin, E*Trade's head of trading & investing told Bloomberg. “We’re in a ‘good news is good, and bad news is bad’ environment, and markets are still trying to figure out if the economy is slowing too much, and whether the Fed is behind the curve.”
The sources: US Department of Labor , Reuters
