The U.S. Department of Labor released data on August 8th showing that initial jobless claims for the previous week stood at 233,000, a decrease of 17,000 from the revised figure of the prior week, and better than the market expectation of 241,000. The four-week moving average was 240,750, an increase of 2,500 from the previous week’s revised average of 238,250.

Meanwhile, continuing claims reached 1,875,000, an increase of 6,000 from the revised figure of 1,869,000 from the prior week.

Amid last week’s weak manufacturing PMI and employment situation data, the market was gripped by fears of an impending economic recession. However, these concerns eased somewhat with the better-than-expected service PMI and jobless claims data. According to FedWatch, the probability of a 50 basis point rate cut at the September FOMC meeting surged from 11% to 85% within a week, before falling back to 56%. It is expected that the market will be highly sensitive to any labor market data leading up to the September FOMC meeting. Therefore, close attention should be paid to whether the job market deteriorates in the coming weeks.

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