Jobless Claims Drop To Lowest Level Since May

Unemployment insurance filings fell for a fourth straight week to the lowest levels since May showing continued strength in U.S. labor demand.

What Happened: Jobless claims fell 6,000 for the week ending Sept. 3 to 222,000 from a downwardly revised level of 228,000 in the prior week, according to data the Labor Department released on Thursday.

The number came in below average economist estimates of 240,000.

The previous week's level of 232,000 was revised down by 4,000. The 4-week moving average was 233,000, a decrease of 7,500 from the previous week's revised average. The previous week's average was revised down by 1,000 from 241,500 to 240,500.

Why It Matters: The SPDR S&P 500 SPY is falling with jobless claims. Unemployment claims have continued to trend lower in recent weeks, job openings remain near record highs and the U.S. added 315,000 jobs last month. 

The Federal Reserve is paying close attention to the jobs market as the central bank aims to cool the hottest inflation numbers in more than 40 years.

The Fed hiked interest rates by 0.75% for the second consecutive month in July, bringing its target fed funds rate up to a range of 2.25% to 2.5%. Recent indicators suggest the Fed is likely to hike rates another 0.75% in its upcoming meeting in mid-September.

Although the economy has slowed due to rising rates, the labor market continues to show strength, which could make the Fed’s upcoming decision all the more difficult.

SPY Price Action: The SPY was down 0.54% at $395.63 at time of publication.

Photo: Oleksandr Pidvalnyi from Pixabay.