Not surprisingly, US jobless claims remained stuck near the lowest levels of the year in the week to September 30, Thursday’s update showed.
At 207,000, claims rose slightly from the prior week, but still came in below estimates.
I suppose this goes without saying, but the last three headline initial claims prints aren’t indicative of a labor market that’s softening, let alone a labor market at cliff’s edge. The four-week moving average is now under 209,000.
Actual, unadjusted claims dropped to 172,800. Continuing claims for the prior week were lower than estimates too.
If you’re curious as to just how sensitive bonds are to incremental labor market data out of the US, note that long-end yields cheapened meaningfully in an apparent knee-jerk reaction to the headline which, while certainly supportive of any hawkish narrative you’re inclined to spin, shouldn’t be market-moving.
The move quickly retraced, but it spoke volumes. The mid-week reprieve for long-end bonds was attributable, at least in part, to a below-consensus ADP print (with some help from falling oil prices). It’s possible that the low claims reading snuffed out whatever light at tunnel’s end bond bulls thought they glimpsed in the private sector hiring data. God help bonds if the NFP headline (or the AHE print) comes in hot Friday.
Meanwhile, Challenger job cuts were 47,457 in September, up 58% YoY, but down 37% from August. Tech has cut the most jobs this year, the latest vintage of the report reminded anyone somehow still not apprised.
“Employers are grappling with inflation, rate increases, labor issues and consumer demand as we enter Q4,” Andrew Challenger said. The top reason for job cuts in 2023 remains concerns about market and economic conditions.
