From our colleagues at our sister company, Argent Trust:
Announced this morning, Initial Jobless Claims were 216,000 for the week ending September 2nd, less than expected and lower than the previous week. Continuing Claims were 1,679,000 for the week ending August 26th, also less than expected and lower than the previous week’s revised figure. Meanwhile, the final measure of Unit Labor Costs shows 2.2% growth for the second quarter, higher than expected and above the previous reading. The final measure of Nonfarm Productivity indicates 3.5% growth for the second quarter, a bit higher than expected but less than the previous figure.
Overall, initial claims were less than expected and remained well below the historical level of 300,000, and continuing claims were also less than the previous week. Companies let go of fewer workers and there are fewer people continuing to collect unemployment. Each of these measures suggests continued resiliency of the labor market despite an increase in the unemployment rate in last week’s jobs report. Meanwhile, both labor costs and productivity grew in the second quarter. With a looming labor disagreement at automobile manufacturers highlighting possible upward pressure on wages, it puts even more pressure on the Federal Reserve to keep a tight stance on monetary policy. Amidst this backdrop, the size and direction of moves in inflation will be a key consideration for the Federal Reserve, the economy, and markets in the weeks ahead.
In all, the yield on the 10-year US treasury ticks higher following the report, and equity futures are lower as we head into the market open.
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