The lowest level since early July! The number of initial jobless claims in the United States last week was 227,000 people

The number of initial jobless claims in the United States last week dropped to the lowest level since early July, and the number of continued jobless claims also fell to the lowest level in nearly three months.

On Thursday, September 5th, the U.S. Department of Labor released data showing that the number of initial jobless claims for the week ending August 31st was 227,000, lower than the expected 230,000 and down from the previous value of 231,000. The seasonally adjusted number of initial jobless claims reached the lowest level in 10 months.

The number of continued jobless claims also dropped to a three-month low of 1.838 million, below the expected 1.869 million, with both indicators showing a slight decrease from the previous values.

Meanwhile, the unexpected drop in the U.S. ADP employment data for August to 99,000, the lowest in three and a half years, signals a weak job market. The mixed results of the two employment data sets have the market eagerly awaiting the release of non-farm payroll data tomorrow, hoping to find more signals regarding the extent of the Fed's rate cut in September.

Following the release of the U.S. initial jobless claims data, short-term futures for the three major U.S. stock indexes rose. Nasdaq futures narrowed their intraday decline to 0.30%, S&P 500 index futures narrowed their decline to 0.07%, and the U.S. dollar index narrowed its intraday decline to 0.21%, briefly falling below 101 before rebounding to 101.75.

Weak employment data leads market to bet on significant Fed rate cut in September

According to Stan Shipley of Evercore, the ADP private employment numbers and other labor market indicators suggest that employment was weak in August.

"With the ADP estimate slowing, tomorrow's employment report may be weaker than expected," said Jeffrey Roach of LPL Financial. "If the employment report surprises investors and is weaker than expected, the likelihood of a 50 basis point rate cut at the upcoming Fed meeting will increase."

Bret Kenwell of eToro noted that after last month's disappointing employment report, it's not surprising that investors are feeling doubtful ahead of Friday's employment data, especially in an environment where "good news is good news, and bad news is bad news."

"While the likelihood of a 25 basis point rate cut by the Fed in September is high at the moment, a disappointing employment report on Friday could increase the chances of a 50 basis point rate cut." "Kenwell pointed out:

"A 50 basis point rate cut seems like good news for the stock market bulls. However, if the Federal Reserve feels compelled to cut rates by 50 basis points directly, it may indicate that concerns about the labor market are greater than previously acknowledged."