In this morning’s data, Initial Jobless Claims were 187,000 for the week ending July 18th, much lower than expected and a decrease of -22,000 from the revised measure of the previous week. Continuing Claims were 1,796,000 for the week ending July 11th, also less than expected, and a decrease of -2,000 from the previous week’s revised figure.
Overall, initial jobless claims came in less than expected and hit the lowest level since the late 1960’s. For many months, initial claims have remained well below the 300,000 top threshold normally considered for a healthy labor market. Given that individuals are easily able to find employment in ridesharing and delivery services, it is likely causing fewer initial jobless claims in the current economy than in years past. Continuing claims are also relatively flat in recent weeks, highlighting the fact that individuals are generally able to find work. Each of these data points suggests stability in the labor market.
With a relatively stable labor market at present, the Federal Reserve has been focused on inflation/price stability as new chair Kevin Warsh starts his leadership role. In this context, the conflict with Iran is in focus given its effect on oil prices in the global market. As oil price fluctuations continue to move through inflation measures, how long the conflict lasts and how fast oil prices adjust lower once resolution is reached will be key factors for the economy and markets in the weeks ahead.
In all, the 10-year US Treasury yield is higher this morning, and equity futures are lower as we head into the market open.
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