U.S. weekly jobless claims fell, signaling resilience in the labor market despite recent economic concerns, boosting investor confidence.
The number of Americans filing for unemployment benefits fell last week, delivering a hopeful sign that the labor market is holding up despite a recent spate of data suggesting it may be cracking.
The reading was lower than the 240,000 market analysts expected and sent Wall Street stock futures higher. Futures on the S&P 500 rose 0.7 percent as of 8:30 a.m. New York time, those on the Nasdaq jumped 0.9 percent, and Dow Jones Industrial Average futures advanced 0.4 percent.
Economist Mohamed El-Erian, the former CEO of U.S. investment management firm Pimco, called the numbers a “relief after last week’s unemployment and growth scare.”
Markets reacted to Friday’s lackluster job creation data with a selloff in stocks and other risky assets, which continued on Monday, when a measure of trading volatility—dubbed the Wall Street “fear gauge”—soared to its third-highest level in history.
Despite Thursday’s Labor Department data showing a downtick in the number of initial jobless claims, the picture was less optimistic as regards continuing jobless claims, which reflect the number of Americans continuing to collect unemployment benefits after filing an initial claim. These jumped to a 33-month high. Continuing claims rose to 1.875 million for the week ended on July 27, which is the highest level since Nov. 27, 2021, when that figure stood at 1.878 million.
The Federal Reserve Bank of Chicago chief was asked if an inter-meeting emergency rate cut is on the table, he struck a noncommittal tone, saying that “everything is always on the table,” including rate increases—if that’s what the incoming data warrant, such as inflation heading back up.