U.S. stocks rise on Fed cut bets; earnings continue to flow
Investing.com - The number of Americans filing first-time jobless claims ticked lower last week, but remained not far from the prior reading, which was at the highest level since 2021.
Initial applications for state unemployment benefits came in at 231,000 for the week ended on September 13, compared to an upwardly-revised mark of 264,000 in the previous week, data from the Labor Department showed on Thursday. Economists had anticipated the figure would stand at 241,000.
The preliminary metric for the week ended on September 6 was at a seasonally-adjusted 263,000 -- the highest point since October 2021 -- although some questions swirled around the impact of the Labor Day holiday and the possibility of some incorrectly filed claims in Texas.
Continuing jobless claims, a proxy for hiring that covers the amount of people receiving benefits after an initial week of aid, was 1.920 million, down marginally from 1.927 million previously and below forecasts of 1.950 million.
The data comes as worries have arisen around a potential weakening in the U.S. labor market, particularly after the August employment report showed that job growth stalled and the economy shed roles in July for the first time in four and a half years.
Job market fears factored into the Federal Reserve’s decision on Wednesday to slash interest rates by 25 basis points to a target range of 4% to 4.25%. Two further rate cuts were signalled to come by the end of the year.
Fed Chair Jerome Powell described the reduction as a form of "risk management," as the central bank looks to balance the twin pressures of a slowing labor market and sticky inflation.
But Powell indicated that recently weak jobs data is playing heavily into officials’ thinking, arguing that "downside risks to employment have risen." An acceleration in inflation, on the other hand, was seen as a more temporary challenge.