US Initial Jobless Are at Lowest Level in Decades

Summary

US initial jobless claims dropped sharply to 187,000, the lowest since 1969, signaling a still-tight labor market. Combined with oil nearing $100 a barrel, the data raises the probability of a Fed rate hike next week to over 35%. Treasury yields are at multi-month highs as markets brace for potential tightening.

• Initial jobless claims fell 22,000 to 187,000, well below the 215,000 estimate.
• Continuing claims remained low, reinforcing the view that the labor market is not weakening.
• Oil prices approaching $100/bbl are stoking inflation concerns and boosting Fed rate hike expectations.
• The probability of a Fed rate hike at the upcoming meeting is now above 35%.
• Two-year and ten-year Treasury yields are at their highest since the start of 2025.
• Hawkish comments from several Fed officials suggest support for further tightening if data warrants.