In this morning’s data, Initial Jobless Claims were 310,000 for the week ending September 4th, a larger drop than expected and is the lowest since March 2020 at the start of the pandemic. Continuing Claims were 2,783,000 for the week ending August 28th, which was slightly higher than expected. Also this morning, the European Central Bank (ECB) announced they will keep rates unchanged, but intend to slow down the pace of asset purchases in their emergency programs given the inflationary outlook and better expectations for economic growth. Overall, initial claims are now almost at the 300k level, which normally denotes a healthy labor market. A welcome development, given last week’s weak jobs report highlighted the stress that still exists for employers trying to fill positions amidst market dislocations and increasing Delta variant cases. The strength of the economy and the labor market, balanced against inflationary pressures will guide the Federal Reserve, and now the ECB, on the pace of reducing asset purchases in the coming months. In all, the 10-year US treasury yield is little-changed and equity futures are lower as we head into the market open.
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