Unemployment Claims Rise Slightly

Investing.com — The number of Americans filing for first-time claims for state unemployment benefits increased more than expected last week, yet remained close to a four-month low.

Seasonally-adjusted initial jobless claims rose to 225,000 in the week ending September 28, up from an upwardly revised 219,000 the previous week, according to data from the Labor Department. Economists had predicted 222,000.

The earlier reading for the week ending September 21 was 218,000, marking the lowest level since mid-May.

Meanwhile, the four-week moving average, which accounts for weekly volatility, is 224,250, a slight decrease of 750 from the previous week.

The number of individuals receiving aid after an initial week, a gauge of hiring, also fell to 1.826 million in the week ending September 21, down by 1,000.

These figures set the stage for the important nonfarm payrolls report expected on Friday, which is projected to indicate a modest job growth in September.

In addition to the jobs report, investors will analyze various indicators this week—such as job openings, private payroll data, and manufacturing and services sector activity—to evaluate the health of the US labor market and the wider economy ahead of the Federal Reserve’s policy meeting in November.

Last month, the Fed reduced interest rates by a notable 50 basis points, indicating their intention to support labor demand amid declining inflationary pressures.

Officials also indicated the beginning of a broader easing cycle, but it remains unclear whether the Fed will implement another significant cut or a traditional quarter-point reduction next month.

Currently, there is approximately a 63% chance the Fed will opt for a 25-basis point cut and a 37% probability of reducing borrowing costs by 50 basis points, according to the CME Group’s (NASDAQ:CME) FedWatch Tool.