A hiring sign is seen in the window of a department store on August 2, 2024 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
Total initial claims for unemployment insurance fell less than expected last week, despite other signs of a weak labor market.
Initial jobless claims totaled a seasonally adjusted 233,000 for the week, down 17,000 from the previous week’s upwardly revised level and below the Dow Jones estimate of 240,000. The Ministry of Labor said Thursday.
The report comes amid a tense Wall Street environment amid signs of slowing job growth and even hints of a possible recession on the horizon. Stock market futures, which were negative earlier, turned sharply positive after the 8:30 a.m. ET release while Treasury yields remained elevated.
While the higher figure helped ease some concerns, the level of continuing claims, which was delayed by a week, rose to 1.875 million, the highest level since November 27, 2021.
Jobless claims have been on an upward trend for most of the year, though they remain relatively moderate. The recent surge has been attributed to disruptions from Hurricane Beryl as well as summer auto plant shutdowns.
The four-week average rose to 240,750, the highest level in nearly a year.
Concerns about the state of the labor market have been heightened following Friday’s nonfarm payrolls report, which showed a gain of just 114,000 jobs in July. At the same time, the unemployment rate rose to 4.3%, triggering the so-called Sahm rule, which measures recessions by measuring changes in the unemployment rate.
Markets have been volatile since then, with a massive three-day sell-off starting last Thursday, raising fears of deeper problems in the US economy.
In contrast, traders expect the Fed to start cutting rates in September, with some even calling for an emergency cut at an emergency meeting to counter recent weakness. Markets are pricing in a strong half-percentage-point cut in the first move and a full-percentage-point cut by year-end.