The Balance Today: News You Need To Know on Oct. 6, 2022

Jobless Claims Jump, Offering Clues About Jobs Report and Future Fed Moves

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Klaus Vedfelt / Gett Images

The number of people filing for unemployment for the first time is on the rise, jumping by 29,000 to 219,000 by the end of last week, according to the Labor Department. While private unemployment remained strong in September, according to data released by ADP yesterday, a rise in jobless claims could indicate that we might see unemployment tick upward in tomorrow’s jobs report for September from the Labor Department.

Today’s jobless claims numbers were higher than expected, and a big jump from the previous week’s numbers, which had been the lowest since the spring. And that may be a clue about what the Federal Reserve does next.

If unemployment rises and the jobs report shows growing weakness in the labor market, there is a chance that the Fed could ease up on how aggressively it raises interest rates to fight inflation. Ahead of the jobs report, the big rally in the U.S. stock market earlier this week has fizzled.

You can expect volatility going forward in the markets as investors continue to look for clues as they weigh risks of a potential recession. So each piece of economic data could provide hope to fuel brief rallies—or fan the flames of discontent.

Investors will also be paying attention to speeches and comments from central bank policymakers for hints about how aggressive they plan to be at the next Fed meeting. Hawkish tones (meaning wanting to raise rates) will likely send markets lower, while dovish comments (lowering rates) could soothe fears that the Fed is sending the U.S. economy into a recession.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Department of Labor. “Unemployment Insurance Weekly Claims.”

  2. ADP. “September Employment Report.”

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