Overview
- The Labor Department reported initial claims for state unemployment benefits fell 10,000 to a seasonally adjusted 196,000 while continuing claims dropped to 1.73 million.
- Economists polled by Reuters had expected about 208,000 initial claims, making the actual reading a clear surprise versus forecasts.
- Analysts warn the move is probably driven by difficulty adjusting for the moving Labor Day holiday and that weekly claims are a noisy measure that focus mainly on layoffs.
- The Federal Reserve raised its policy rate to a 3.75%–4.00% range and cited a strong labor market as part of its rationale for the quarter-point increase.
- Many firms remain cautious about hiring because rising oil prices and geopolitical tensions tied to the U.S.-Israeli conflict with Iran are fueling inflation risks that could restrain job growth.