Jobless claims surge to highest level since August 2023

Published On Oct 10, 2024, 9:21 AM

The latest data from the Department of Labor shows that unemployment claims have surged to 258,000 for the week ending October 5, 2024, marking the highest level since August 2023 and exceeding economists' expectations. The increase in claims indicates a cooling labor market, even amid a strong jobs report from September where 254,000 jobs were added. The rise in jobless claims aligns with a slight drop in the unemployment rate from 4.2% to 4.1%. Additionally, the market is reacting to these indicators with a decreased likelihood of interest rate cuts by the Federal Reserve in November.

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Stock Forecasts

SPYView SPY chart on TradingView

Negative

Given the rise in jobless claims and the cooling labor market, there may be increased volatility in stocks, particularly in sectors sensitive to economic changes, such as consumer discretionary and financials.

XLPView XLP chart on TradingView

Positive

The increasing jobless claims could also indicate a potential slowdown in consumer spending and economic activity, suggesting that defensive sectors may be more favorable in the short term.

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