Initial Jobless Claims Fall Down In A Surprise Move

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Initial Jobless Claims Fall Down In A Surprise Move

Initial Jobless Claims Fall to 216K In A Surprise Move

The last week's data shows a major decrease in the number of US citizens filing for unemployment benefits. According to economists, this signals the labor market tightness and thus will likely play a major role in the Fed's upcoming decision.

On the 2nd of September, the last week ended and showed that up to 216,000 people filed for jobless claims. Since this economic indicator is used to gauge the number of lay-offs, it gives important pointers about the health of the jobs market.

US Labor Market Shows Strength

A week before that, around 229K people filed for jobless claims, which suggest a change of around 13,000. On the contrary, economists were forecasting the initial jobless claims to rise to the 234K level. In addition, the 4-week MA, which highlights the average number of jobless claims without the short-term volatility, was forecasting a number of 229,250.

That's why it wouldn't be wrong to say that the initial jobless claims recent reading has surprised everyone, including the Fed.

At the same time, the number of people who fall under the category of receiving benefits has also gone down to around 1.679 million with a change of -40,000. A closer look at the continuing claims tells us that most of the workers are experiencing short-term unemployment.

According to a technical analyst and economist, the labor market of the US continues to exhibit strength, which will allow the Fed to have more freedom at the upcoming meeting.

On the surface, the initial jobless claims tell us that fewer people are unemployed. In other words, the employment rate might be improving, which will allow consumer spending to stay consistent or move higher as well.

However, the initial jobless claims aren't regarded as important as the NFP (nonfarm payrolls). Nonetheless, the recent data is USD positive and will allow the greenback to gain ground against other currencies.

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