- Initial jobless claims slipped to a seasonally adjusted 194,000 for the week ending October 17, below expectations. That is just off the 189,000 reported for the week of July 18, the lowest since September 1969.
- The four-week moving average is down to 197,750, compared with an average of 212,000 over the past year. Employers are holding on to workers even as hiring remains weak, a low-hire, low-fire pattern.
- Nonfarm payrolls rose by just 29,000 in September and have averaged 69,000 a month in 2026, while unemployment rose to 4.2% on a sharp jump in labor force participation. The layoff rate over the prior 12 months fell to 1% of the workforce.
- Markets expect the Fed to hold rates at next week’s meeting before raising them by a quarter point in December. Policymakers have described the labor market as a source of strength and turned their focus to inflation running well above the 2% target.
What Happened?
The Labor Department reported on Thursday that initial filings for unemployment insurance fell to 194,000, CNBC reported. The data covers the reference week the Bureau of Labor Statistics uses to calculate payroll growth, and the September jobs report is due November 5. Layoffs declined by 61,000 in August, according to BLS data released September 29. Jefferies economist Thomas Simons said the claims data suggests labor market conditions are stable despite pessimistic consumer surveys and headlines about job cuts.
Why It Matters?
Low claims remove one of the main arguments for the Fed to stay patient, because a labor market that is not shedding workers gives policymakers room to focus on inflation. That matters for bonds and rate-sensitive stocks, since the market is already pricing a December hike. Weak hiring and near-record-low firing together point to an economy where workers keep their jobs but job seekers struggle to find new ones. Simons noted that the data cuts against what he called the “phantom job-stealing power of AI.”
What’s Next?
Next week’s Fed decision is the immediate catalyst, with markets expecting a hold in October. The November 5 jobs report will show whether payroll growth picks up from September’s 29,000. Any rise in claims from these levels would be an early sign that the low-fire trend is breaking. Inflation data will remain the deciding factor for whether a December hike goes ahead.
Affected Tickers and Coins: ZQ, ZN, TLT, SHY
Source: CNBC
