Jobless Claims Exceed Expectations, Signaling Early Signs Of Cracks In US Labor Market

The U.S. job market continues to show signs of cooling, according to the latest jobless claims data released by the U.S. Department of Labor on Thursday. E-mini futures for the S&P 500 index, which is tracked by the SPDR S&P 500 Trust ETF SPY rose 0.3% following the print. 

What To Know:

• The number of Americans applying for unemployment benefits rose by 11,000 to 239,000 in the week ending April 8th.
• The figure came in higher than the projected 232,000, indicating some cooling in the labor market.
• Initial claims rose by 27,457 to 234,577 on a seasonally unadjusted basis.
• Unemployment claims' four-week moving average, which eliminates week-to-week variability, rose from 237,750 to 240,000. 
• Continuing claims for unemployment benefits in the United States dropped slightly to 1.810 million in the week ending April 1, down from 1.823 million in the prior week.

Why It Matters: A weakening labor market is good news for the Fed's fight against inflation, since it lessens wage growth pressures. It's also proof that the economy is slowly cooling as a result of the tightening financial conditions.
Rising claims, on the other hand, may suggest the earliest signs of an economic downturn, which may have a negative impact on profitability for businesses in the months to come. 

Rates Reactions
Just after the data release, futures traders priced in a nearly 68% chance of a 25-basis-point hike at the Fed’s May meeting. Probabilities for the Fed's June meeting now assign a 65% chance of a pause and a 28% chance of a rate cut, according to the latest CME FedWatch Tool.

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