U.S. initial jobless claims unexpectedly fell last week to the lowest levels since April, signaling the labor market remains resilient despite continued rate hikes from the Federal Reserve.
What Happened: Jobless claims decreased by 16,000 for the week ending Sept. 24 to 193,000 from a downwardly revised level of 209,000 in the prior week, according to data the Labor Department released on Thursday.
The number came in well below average economist estimates of 215,000.
The previous week's level of 213,000 was revised down by 4,000. The four-week moving average was 207,000, a decrease of 8,750 from the previous week's revised average. The previous week's average was revised down by 1,000 from 216,750 to 215,750.
Continuing claims dropped to 1.347 million in the week ended Sept. 17, a decrease of 29,000 from the previous week's revised level.
Gross domestic product dropped at an unrevised annual rate of 0.6% last quarter, the government said in its third GDP estimate. In the first quarter, real GDP decreased 1.6%.
The second-quarter decrease was the same as previously estimated in the second estimate, which was released in August. The update primarily reflects an upward revision to consumer spending that was offset by a downward revision to exports.
Why It Matters: The SPDR S&P 500 (NYSE:SPY) ticked slightly lower following the release premarket Thursday. Jobless claims have been trending lower in recent weeks, but hiring is expected to slow as the Federal Reserve continues to hike interest rates.
Last week, the Fed raised its benchmark rate by 0.75% for the third straight time and indicated that it will continue to hike rates higher in what has been the most aggressive tightening cycle in more than 40 years.
Following last week's increase, the Fed has raised rates by a total of 3% in 2022 and its target fed funds rate is at the highest levels seen since before the 2008 financial crisis. The latest Consumer Price Index reading of 8.3% shows that inflation is still near the highest levels since the 1980s.
In a press conference following the decision on rates, Fed Chair Jerome Powell reaffirmed the central bank's commitment to bringing inflation back down to its 2% goal.
"Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run. We will keep at it until we're confident the job is done," Powell said.
SPY Price Action: The SPY was down 1.12% at $366.37 Thursday morning, according to Benzinga Pro.
Photo: Mike Lawrence from Flickr.
