Initial jobless claims fall to lowest level in seven months

Initial jobless claims dropped to 216,000 last week, the fewest since February, as the labor market remained tight, according to data from the Bureau of Labor Statistics.

New claims remained far below the threshold of 250,000 that we see as signaling a recession, raising the chance that the cooling economy will have a soft landing.

But one should take last week’s claims data with a grain of salt as new filings around holidays like Labor Day are often volatile.

initial jobless claims

Still, new claims have trended down since early August, from 250,000. The 13-week moving average—our preferred measure—fell from 241,000 to 238,000 for the week ending Sept. 2.

The sharp drop in new claims with a tight labor market brought continuing claims down to 1.68 million for the week ending Aug. 26, also the fewest since February and about 10% lower than December 2019, before the pandemic.

With new jobless claims an important leading indicator of job gains, we should expect another strong month for the labor market this month.

While Thursday’s data did not change our view and the market’s view that the Federal Reserve will hold rates steady this month, it added to the case for one more hike in November. The market views the probability of that happening as a coin flip.

The takeaway

Even though we do not think rates should go higher, all options remain on the table for the Fed’s November meeting should inflation rebound more strongly than expected as consumer spending holds up.

Let’s Talk!

Call us at (325) 677-6251 or fill out the form below and we’ll contact you to discuss your specific situation.

  • Topic Name:
  • Should be Empty:

This article was written by Tuan Nguyen and originally appeared on 2023-09-07.
2022 RSM US LLP. All rights reserved.
https://realeconomy.rsmus.com/initial-jobless-claims-fall-to-lowest-level-in-seven-months/

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each is separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/about us for more information regarding RSM US LLP and RSM International. The RSM logo is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.