初请失业金人数的减少可能有助于让市场相信，美国劳动力市场只是恢复到疫情前的趋势，而不是迅速恶化。上周公布的非农就业报告显示，7月雇主大幅缩减招聘规模，失业率连续第四个月上升并触发了一个关键的衰退指标。The number of initial jobless claims fell by 0.017 million to 0.233 million for the week ending August 3, falling short of expectations of 0.24 million, the biggest drop in nearly a year.
Zhitong Finance learned that data released by the US Department of Labor on Thursday showed that in the week ending August 3, initial jobless claims fell by 0.017 million to 0.233 million, lower than the expected 0.24 million, the biggest drop in nearly a year. This is due to a decrease in the number of applicants in states where the number of applicants has increased significantly in recent weeks, such as Michigan, Missouri, and Texas. The number of renewed jobless claims fell slightly to 1.875 million for the week ending July 27, which is expected to be 1.87 million.
Despite an upward trend in the number of applications and renewals at the beginning of this year, it is still hovering around 2019 levels. The drop in data released on Thursday may ease some concerns — that the US labor market is cooling too fast after the non-farm payrolls report that frightened the market last week.
The decline in initial jobless claims may help convince the market that the US labor market is only returning to pre-pandemic trends rather than rapidly deteriorating. The non-farm payrolls report released last week showed that in July, employers drastically reduced the recruitment scale, and the unemployment rate rose for the fourth month in a row, triggering a key recession indicator.
Concerns about the state of the job market escalated after the release of the non-farm payrolls report last Friday. The number of people employed in non-farm payrolls increased by only 0.114 million in July, far below expectations. Meanwhile, the unemployment rate rose to 4.3%, triggering the so-called “Sam Rule,” which measures changes in the unemployment rate to determine economic recession.
Thomas Hayes, analyst at Great Hill Capital LLC, said, “Since the release of the US non-farm payrolls report last Friday, everyone has been nervous about the economic recession caused by Sam's rules. Initial jobless claims fell short of expectations, easing concerns about a complete collapse of the labor market. Our economy is quite strong and there will be no imminent recession, so we can wait a few more weeks for the Federal Reserve to cut interest rates for the first time.”
This has led to a sell-off in global markets and prompted calls for the Federal Reserve to cut interest rates urgently before the next scheduled policy meeting in September — something economists think is highly unlikely. In contrast, some expect interest rates to be cut by 50 basis points in September instead of the usual 25 basis points. The market expects the Federal Reserve to cut interest rates by at least a full percentage point by the end of the year.
Since the employment report was released last Friday, Federal Reserve officials have said they will not overreact to the one-month data, but have acknowledged that the employment aspect of their dual mission has received more attention since inflation has basically abated. Federal Reserve Chairman Powell said before the employment report was released that the labor market is slowly returning to pre-pandemic levels. Other data supports this view, as job vacancies are still very high and layoffs are rare, although some well-known giants such as Dell Technologies and Intel have recently made layoffs.
Marc Chandler, market strategist at Bannockburn Global Forex, said, “When it comes to the labor market, it's multi-dimensional, not a single number. So I think the number of initial jobless claims in the US is one of the numbers. Today's initial request data is slightly lower than expected, although the four-week moving average is still higher. The claim that the economy is about to decline seems unreliable.”
Weekly data on the number of initial jobless claims is easily affected by fluctuating factors, especially at this time of year. The data is prone to fluctuations due to school summer vacation closures and summer car factory shutdowns. However, the four-week average of jobless claims in the US, which was less volatile, rose slightly to 0.24 million at the beginning of the week ending August 3, the highest level in a year.
Prior to seasonal adjustments, initial jobless claims fell by about 13,600 to 203,054, the lowest since May. The number of applicants in Texas surged after Hurricane Beryl made landfall in early July, and recently declined, but the impact of Hurricane Debbie on the southeast is likely to be revealed in next week's data.
After the report was released, US benchmark stock index futures and US Treasury yields rose. US 2-year and 3-year Treasury yields rose 10 basis points on the same day; US 10-year Treasury yields rebounded above 4%. S&P 500 futures increased to 1%, Nasdaq 100 futures rose 1.4%, and Dow futures rose 0.5%.
Wasif Latif, president and chief investment officer of Sarmaya Partners in Princeton, New Jersey, said that the initial number of applicants fell short of expectations, so the market seemed very happy. At least what the bulls in the market are happy about is that this may be a sign of a soft landing; this isn't a very influential data; the big impactful data is last Friday's unemployment rate and next month's unemployment rate.
