"U.S. Labor Market Surprisingly Strong"...Lowest 'Unemployment Claims' in 8 Months

Will the Fed's Tightening Message Gain Momentum?

Continued Unemployment Claims at 3-Month Low

The number of new unemployment claims in the United States has hit its lowest level in eight months.

The U.S. Labor Department announced on the 2nd that the number of new unemployment claims for the fourth week of December last year (22nd-28th) was tallied at 211,000, down 9,000 from the previous week (220,000). This figure was below the market estimate of 222,000.

The number of new claims has decreased for three consecutive weeks, continually falling short of estimates. Except for the first week of last month, which recorded 242,000 claims, the number of claims has remained in the 210,000-220,000 range since the third week of October last year.

The number of continued unemployment claims, which refers to those who have applied for unemployment benefits for more than two weeks, also decreased to 1.84 million, marking a three-month low. The four-week moving average of unemployment claims, which removes short-term volatility, also decreased to 223,250, the lowest level since the end of November last year.

Bloomberg evaluated that "the U.S. labor market is surprisingly strong." As a result, it seems that the hawkish (tightening-preferred) message of the U.S. Federal Reserve (Fed) will gain momentum.

After the Fed hinted at the possibility of slowing down the pace of rate cuts this year, Wall Street is focusing on U.S. employment, consumption, and other economic indicators to gauge the timing and extent of additional rate cuts. Jerome Powell, the Fed Chairman, also mentioned, "We will respond to the data."

According to the CME FedWatch Tool on this day, the federal funds rate futures market reflected an 88.8% probability that the benchmark interest rate will be held steady this month. The possibility of a 0.25% point cut was projected at 11.2%.

Reporter Lim Da-yeon allopen@hankyung.com