US jobless claims are at their lowest since April. What will happen to the rate?

Initial applications for unemployment benefits in the U.S. unexpectedly decreased by 6 thousand - to 216 thousand - for the week ended November 22. This was the lowest value since mid-April, notes Bloomberg. The average forecast of economists surveyed by the publication, assumed 225 thousand applications.

The data on benefits better than market expectations showed that employers continue to retain employees, although hiring new ones more cautiously, the agency writes. Despite more frequent announcements of upcoming layoffs at large companies - such as Verizon Communications and Amazon - no noticeable increase in actual layoffs is yet visible, Bloomberg adds.

Confirmation of a mildly weaker labor market could argue for further easing of the Fed's monetary policy in December - which in turn would support growth stocks, Mikhail Denislamov, deputy director at Freedom Capital Markets Research, wrote before the statistics were released, predicting jobless claims at 226,000.

The publication did not weaken the market: all three major U.S. indices rose by about 0.9% in trading on November 26. The yield on 10-year U.S. Treasury government securities rose by 2 basis points - to 4.02%, and the dollar exchange rate remained almost unchanged, notes Bloomberg.

"Overall, the data [on jobless claims] was stronger than expected and confirmed that mixed trends and mixed dynamics persist in the real economy," BMO analyst Jan Lingen said in an interview with Bloomberg. - Still, there's nothing in the reports that would prevent the Fed from cutting rates by 25 basis points on Dec. 10."

The Fed has already cut interest rates at its last two meetings in an attempt to support a slowing labor market. According to CME FedWatch, a tool that monitors market expectations for the regulator's decisions, 83% of traders now believe it will further ease policy and cut rates by another 25 basis points at its next meeting in December.

This article was AI-translated and verified by a human editor