US jobless claims tick up to 200,000 but stay near historic lows

what happened

Reuters reports that the number of Americans applying for jobless benefits edged up last week, yet the figure stayed at a level that points to a firm job market. Initial claims rose 9,000 to a seasonally adjusted 200,000 in the week ended November 7, the Labor Department said Thursday. Analysts surveyed by Reuters had penciled in 195,000.

Claims have hovered at or below 200,000 since mid-September, not far above the 189,000 reached in July, the lowest reading since 1969. That has fueled talk that the labor market may be tightening, though some economists disagree: wages are rising at a moderate pace, and they argue that a shrinking workforce, driven by retirements and tougher immigration enforcement, explains the low claims. Veronica Clark of Citigroup said a smaller labor force could mean fewer people filing, and that unemployment may slip toward 4.0% by early 2027.

Continuing claims, a rough gauge of hiring, fell 20,000 to 1.697 million in the week ended October 31. That figure leaves out some jobseekers, such as recent graduates and people who have used up their benefit eligibility.

why it matters

Markets have nearly priced in a Fed rate increase: according to CME Group's FedWatch tool, traders expect a 25-basis-point hike in December and another in January, after October consumer prices came in above forecasts. Firm labor data reinforces those expectations, which supports the dollar and weighs on bonds.

market impact

Dollar and US Treasuries: a steady job market strengthens bets on tighter Fed policy, supporting USD and pressuring bonds

• ▲US dollar pressure up — firm labor data strengthens expectations of further Fed rate hikes
• ▼US Treasuries pressure down — higher rate expectations push yields up and bond prices down

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