The latest report from the US Department of Labor showed that initial claims for unemployment insurance registered a lower-than-expected number last week, providing some relief amid concerns about a weak labor market.
According to the report, first claims for seasonally adjusted jobless benefits totaled 233,000 for the week, down 17,000 from the previous week's revised level and below the Dow Jones estimate of 240,000.
The report comes as Wall Street is reeling from signs of slowing job growth and signs of a possible recession. Prior to the release of this report on, the stock futures market showed a decline, but turned positive after the release of this data, while Treasury bond yields continued to rise.
While the total number of claims calmed some concerns, the number of continuous claims measured a week later rose to 1.875 million, the highest level since November 27, 2021.
Unemployment claims have shown an increasing trend throughout this year, but are still at a relatively moderate level. The recent increase was attributed to disruptions from Hurricane Beryl as well as auto factory shutdowns over the summer.
The four-week average rose to 240,750, the highest in nearly a year. In the previous week, claims jumped by 14,000, adding to fears that layoffs are on the rise.
Concerns rose about labor market conditions after last Friday's nonfarm payrolls report, which showed an increase of just 114,000 in July. At the same time, the unemployment rate rose to 4.3%, triggering what is known as Sahm's Rule, which measures a recession by evaluating changes in the unemployment rate.
Markets have experienced high volatility since then, with a massive three-day sell-off starting last Thursday that raised concerns of deeper problems in the US economy.
As a result, traders expect the Federal Reserve to begin cutting interest rates in September, with some even calling for emergency cuts between meetings to match the latest weakness.
