The U.S. initial jobless claims have decreased last week, while continuing claims have reached their highest level in nearly three years, potentially reflecting increased difficulty for workers in finding new employment.

The U.S. initial jobless claims for the previous week were 227,000, a decrease of 15,000 from the revised figure of 242,000 from the previous period, according to data released by the U.S. Department of Labor on October 24. The 4-week moving average was 238,500, an increase of 2,000 from the revised figure of 236,500 in the prior period.

Read more at Datatrack

The number of continuing unemployment claims was 1,897,000, an increase of 28,000 from the revised figure of 1,869,000 in the previous period, marking the highest level since November 3, 2023.

Read more at Datatrack

Typically, an increase in continuing claims reflects growing difficulties for workers to find new employment; however, the recent rise may have been influenced by the impact of Hurricanes Helen and Milton.

In addition, Boeing’s multi-week strike may have led to layoffs among some of its suppliers. According to Bloomberg reports, around 33,000 Boeing employees participated in the strike, with approximately 64% rejecting Boeing’s latest contract offer on October 23, extending the strike further.

The rise in initial jobless claims in early October, combined with the effects of the recent hurricanes and Boeing’s strike, may result in an uptick in the October unemployment rate or a slowdown in nonfarm payroll growth.

The U.S. Consumer Price Index (CPI) continued to decline in September, according to data released by the U.S. Bureau of Labor Statistics on October 10. The year-over-year CPI growth rate was 2.4%, down 0.1% from the previous month. Although slightly above the market expectation of 2.3%, it remains the lowest level since February 2021. The month-over-month increase was 0.2%, unchanged from the previous month and slightly higher than the market forecast of 0.1%.

Core CPI rose by 3.3% year-over-year, marginally exceeding both the previous month’s figure and market expectations of 3.2%.

Read more at Datatrack

The monthly increase was primarily driven by rising prices in apparel, medical services, and transportation services. On a positive note, the rent and owners’ equivalent rent, which have been key factors slowing the CPI decline, showed signs of easing. On a year-over-year basis, rent inflation grew by 4.8% (down from 5.0% in the prior month), while owners’ equivalent rent increased by 5.2% (down from 5.4%), both continuing their gradual deceleration.

(Source: BLS, TrendForce)

Additionally, the Bureau of Labor Statistics reported the latest weekly jobless claims. Initial claims reached 258,000, an increase of 33,000 from the previous week, while continued claims rose to 1,861,000, up by 42,000 from the prior month. Despite the rise in claims, the numbers remain within a healthy range, indicating that the labor market is still in balance.

Read more at Datatrack

Following the release of this data, market expectations for Federal Reserve rate cuts remained unchanged, with projections for two cuts this year and four more in 2024.

The U.S. Department of Labor released the unemployment insurance weekly claims report on August 22. Initial claims for unemployment benefits for the previous week were 232,000, an increase of 4,000 from the revised figure of the prior week. The four-week moving average was 236,000, a decrease of 750 from the revised figure of the previous week. The number of continuing claims for unemployment benefits rose by 4,000 to 1,863,000, nearing the highs last seen in November 2021.

Overall, the upward trend in initial unemployment claims has not yet changed. In the minutes of the July FOMC meeting, Federal Reserve officials clearly indicated that initial claims for unemployment benefits are a key indicator for monitoring the labor market (Regarding the outlook for the labor market, participants discussed various indicators of layoffs, including initial claims for unemployment benefits and measures of job separations.). Therefore, it remains crucial to closely monitor any significant changes in the trend of unemployment claims.

Read more at Datatrack

The U.S. Census Bureau released retail sales data on August 15. In July, retail sales increased by 2.7% year-over-year, higher than the revised 2% from the previous month. On a month-over-month basis, retail sales rose by 1%, significantly above the revised -0.2% from the previous month and the market expectation of 0.4%. The control group retail sales (excluding auto sales, building materials, gasoline stations, and food services) increased by 0.3% month-over-month, down from the previous month’s 0.9%. The growth was primarily driven by auto sales, which increased by 4% month-over-month, while core retail sales (excluding auto-related sales) and double core retail sales (excluding auto sales and gasoline stations) both increased by 0.4%.

Read more at Datatrack

Additionally, the initial jobless claims data was released on the same day. The number of initial claims for unemployment benefits this week was 227,000, lower than the previous week’s 233,000 and the market expectation of 235,000. This marks the second consecutive week of decline in initial jobless claims.

Read more at Datatrack

As July’s inflation data continues to normalize, consumer spending remains resilient, and initial jobless claims come in better than expected, the probability of a 25 basis point rate cut has returned to 74% (compared to last week’s peak probability of 85% for a 50 basis point cut). However, the market is still awaiting the release of the non-farm payroll data and the unemployment rate, which are currently the Federal Reserve’s top concerns, before expectations for a rate cut in September may be adjusted.