Weekly Jobless Claims Rise Again, Reflecting More Labor Market Weakness: What You Need To Know

The U.S. Department of Labor reported 245,000 initial jobless claims for the week ending April 15 on Thursday, showing an increase for the second week in a row and indicating further cooling in the labor market. 

What To Know: The number of Americans applying for unemployment benefits rose by 5,000 to 245,000 in the week ending April 15. 

The figure came in higher than the projected 240,000, indicating some cooling in the labor market.

On a seasonally unadjusted basis, claims fell by 7,021 or 3% from the previous week to 228,216.

The four-week moving average, which eliminates week-to-week variability, declined marginally from a revised 240,250 to 239,750. 

Continuing claims for unemployment benefits in the United States rose to 1.865 million in the week ending April 8, up from 1.804 million in the prior week.

Why It Matters: A softening labor market is good news for the Fed's fight against inflation as it could reduce wage growth pressures. 
Rising claims, on the other hand, may indicate the first symptoms of an economic downturn, which may have an adverse impact on business profitability in the coming months.

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Market Reactions: Markets were volatile on Thursday as mega-cap firms reported mixed quarterly earnings, with Tesla plunging 7% in pre-market trading after its first-quarter results disappointed investors.  

E-mini futures on the S&P 500 index, which is tracked by the SPDR S&P 500 Trust ETF (ARCA: SPY), fell 0.7% on the day and were broadly unchanged in the minutes following the jobless claims print. 

U.S. Treasury yields moved lower, with the two-year yield dropping to 4.18%, down 8 basis points, and the 10-year yield dropping 6 basis points to 3.53%. 

Fed futures priced in a nearly 90% chance of a 25-basis-point hike to 5%-5.25% at the Fed’s May meeting. Probabilities for the Fed's June meeting now assign a 64% chance of a pause at 5%-5.25% and a 34% chance of a further hike to 5.25%-5%, according to the latest CME FedWatch Tool.

What's Next For The Day?

Several Fed speakers will hit the wires on Thursday:

Noon ET: Fed’s Waller Discusses Financial Innovation

12:20 p.m. ET: Fed’s Mester Discusses the Economic and Policy Outlook

3 p.m. ET: Fed’s Bowman Takes Part in Fed Listens Event

3 p.m. ET: Fed’s Logan Speaks at Fed Listens Event in Texas

5 p.m. ET: Fed’s Bostic Discusses Economic Conditions

7:45 p.m. ET: Fed’s Harker Discusses the Economic Outlook

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