The US economy may be headed into recession faster than many believe, but the labor market continues to resist.

Initial jobless claims fell to just 190,000 last week, the lowest since September and before that, April.

The print was well below consensus, which saw 214,000. Indeed, the lowest estimate from nearly four-dozen economists surveyed was 199,000.

The prior week was unrevised, which means the four-week moving average is now just 206,000, the lowest since May.

Tech layoffs have dominated the financial news cycle over the past several weeks, and although the sector eliminated nearly 100,000 jobs in 2022 (the most since the dot-com bust, apparently), the US economy thrives not on skilled positions, but on low-paid, unskilled labor, and by most indications, there’s no shortage of demand for those workers.

Whatever the case, the tech job cuts make for “good” headlines (where “good” just means flashy), but from a 30,000-foot level, the US labor market is still hot. There are millions upon millions of openings, businesses are still struggling to hire and wage growth, while cooling, is still elevated, in part due to persistent churn evidenced by still sky-high quits.

Although some Fed officials have suggested in rather explicit terms that the next rate hike will almost surely be 25bps (the market is priced accordingly), the labor market ratio cited habitually by Jerome Powell for policymakers’ obstinance in the face of tentative signs that inflation is receding, remains stubbornly elevated.

“The most striking release within this morning’s data offerings was the improvement in initial jobless claims,” BMO’s Ian Lyngen remarked. “This move was especially relevant given the data was for nonfarm payrolls survey week,” he added. “As a result, NFP estimates will be skewed higher than would otherwise have been the case.”

This comes with all the usual caveats. The labor market is a lagging indicator and, of course, the pandemic might’ve resulted in a semi-permanent distortion whereby worker shortages become a fixture of the economy. Or maybe it’s a matching efficiency problem. That question (i.e., Is it too many open positions tied to too much consumer demand or is it an intractable mismatch between job openings and the type of workers available to fill them?) is at the heart of the soft landing debate.

Continuing claims rose in the prior week, Thursday’s data showed, but even there, the print was below estimates.

At the same time, the Philadelphia Fed gauge didn’t match the Empire survey (released earlier this week) for shock value. The headline Philly print was a modest beat, the prices paid index fell, the prices received gauge rose, the new orders index improved and the employment gauge moved up. Suffice to say the report was mixed.

All in all, Thursday’s data was much less recessionary than Wednesday’s dour readings, which, in turn, makes the case for an incrementally more hawkish Fed. And around we go in the good-news-is-bad-news-is-good-news-unless-it’s-too-bad insanity loop.