The US Department of Labor recorded an unexpected decrease in unemployment benefit claims. The figure for the week ending September 20 was 218,000, compared to a forecast of 235,000 and a revised 232,000 the previous week.
Decline in Claims and Market Reaction
The number of continuing claims also slightly decreased—to 1.926 million, which is 2,000 less than the previous week. These data show that most workers who lose their jobs quickly find new positions and do not remain on benefits for long.
Stock index futures reacted with a decline. S&P 500 contracts fell by 0.5%, Nasdaq-100 lost 0.7%, and Dow Jones dropped 0.2% (about 110 points). Pressure was intensified by shares of technology companies, including Nvidia and Oracle.
Fed Decision and Employment Risks
The report came shortly after the Federal Reserve cut the rate by 0.25 percentage points, to a range of 4%–4.25%. This is the first rate cut in 2026. The Fed explained the move as due to “increased risks to employment,” noting a slowdown in labor market dynamics: slower job growth and a drop in job openings to the lowest level in several years.
Despite this, employers are so far avoiding mass layoffs. Earlier in September, the number of claims temporarily spiked, but new data confirm: companies are responding cautiously to the economic slowdown, reducing hiring but retaining current staff.
GDP Growth and Economic Outlook
Amid labor market data, revised estimates of economic growth were also released on Thursday. US GDP increased by 3.8% year-over-year, exceeding analysts’ expectations. This indicates that slower hiring has not stopped overall growth, although businesses remain cautious.
What’s Next?
The decline in benefit claims eases some investor concerns about possible deterioration in employment. However, the combination of lower rates and weaker hiring dynamics may mean the economy is entering a slowdown phase. Market attention will now focus on upcoming inflation and employment reports, which will help determine whether the Fed’s move is enough to maintain a balance between growth and labor market stability.
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