Weekly U.S. Jobless Claims Fall to 213,000 - Labor Department

By Scott Kanowsky 

Investing.com -- The number of Americans filing for unemployment insurance unexpectedly fell last week, according to data from the Department of Labor, as labor demand remains robust despite looming concerns over surging consumer prices.

Seasonally adjusted initial jobless claims in the U.S. for the week ending September 10 totaled 213,000, a drop of 5,000 from the previous period and the lowest since late May. Economists had predicted the reading would climb to 226,000.

The figure, seen as a proxy for layoffs, has now fallen for five straight weeks.

Meanwhile, the four-week average - which adjusts for volatility in the weekly figures - slid by 8,000 to 224,000. Continuing claims also remained at historically low levels even though they climbed marginally to 1.4M.

Analysts at Vital Knowledge said the latest decline in jobless claims will not come as welcome news to either the Federal Reserve or financial markets, with both wanting to see a softening in employment data.

Jobless claims have dipped recently as companies aim to fill millions of open positions and keep employees on their payrolls. But the Fed, keen on wrangling in soaring inflation, has pursued large interest rates hikes this year that policymakers believe may subsequently ease this high demand in the labor market and beyond.

Elsewhere, a report on Thursday showed U.S. retail sales rose surprisingly by 0.3%, as consumers dropped some of their recent caution with regard to other areas of spending. This came on the heels of key inflation data earlier this week, which showed that consumer price growth was stronger than expected in August.

The numbers have helped solidify the impression that the Fed will continue to roll out big rate increases in the near term. According to the FedWatch tool from CME Group, 80% of traders now expect a 75 basis point rise in borrowing costs at the central bank's September meeting, while 20% are forecasting an unprecedented uptick of 100 basis points.