Affected by the hurricane, initial jobless claims in the United States unexpectedly rose to a one-year high

According to Wisdom Financial, last week, the number of initial jobless claims in the United States rose to the highest level in over a year, reflecting a significant increase in applicants in Michigan and several states affected by Hurricane "Helene". Data released by the U.S. Department of Labor on Thursday showed that the number of initial jobless claims for the week ending October 5 increased by 33,000 to 258,000, the highest since August 2023, with economists predicting a median of 230,000. The number of continued jobless claims rose to 1.86 million in the previous week.

Meanwhile, the U.S. September CPI data released on Thursday exceeded expectations across the board, indicating a halt in the recent easing of price pressures. The data showed that the overall CPI in the U.S. rose by 2.4% year-on-year in September, marking the sixth consecutive month of decline, slightly higher than the market's expectation of 2.3%, but still the lowest year-on-year increase since the beginning of 2021, lower than the previous value of 2.5%; the overall CPI in the U.S. rose by 0.2% month-on-month in September, slightly higher than the market's expectation of 0.1%, and unchanged from the previous value. The core CPI, considered a better reflection of underlying inflation, also exceeded market expectations. The U.S. core CPI rose by 3.3% year-on-year in September, hitting a new high since June, higher than the market's expectation of 3.2%, and unchanged from the previous value; it rose by 0.3% month-on-month, also higher than the market's expectation of 0.2%, and unchanged from the previous value.

Analyst Adam Crisafulli from Vital Knowledge stated that after the CPI report, although the instinctive conclusion is negative (poor employment + rising prices = stagflation), the Federal Reserve is unlikely to have a "radically different" view after the release of this report. With recent FOMC rhetoric shifting positively towards employment, Powell and his colleagues may focus more on evaluating initial claims data rather than CPI. In addition, the slowdown in housing inflation is a potential positive development.

Goldman Sachs stated that next month's employment data will be the focus of the Fed's accommodative policy. Following the release of CPI and initial jobless claims data, Whitney Watson, Co-Head of Fixed Income and Liquidity Solutions at Goldman Sachs, commented: The September CPI report was stronger than expected, especially the unexpected rise in core CPI. However, labor market data remains the dominant factor for the Fed, and we believe next month's employment data will be a more important data point in determining the pace and extent of the Fed's accommodative measures.

After hurricanes "Helene" and "Milton", initial jobless claims may continue to fluctuate, complicating the Fed's efforts to accurately assess the potential developments in the U.S. labor market. Due to storm damage, many people in the southeastern United States are unable to work, and some may also find it difficult or delayed to apply for unemployment benefits.

Analyst Edward Harrison pointed out that last week's U.S. non-farm payroll report was the last clean data before the next FOMC meeting, as subsequent data will be affected by strikes and hurricanes. Today's jobless claims data confirmed this. However, the bond market is uncertain how to react, as high inflation data offset the impact of jobless claims, leading to volatility. Nevertheless, over time, yields may rise due to both core and overall inflation being higher than expected After the data was released, institutional analysis showed that traders slightly increased their bets on a 25bp rate cut by the Federal Reserve in November, but they have not fully digested this yet. The series of data from the United States sent out mixed signals, with traders weighing concerns in the labor market against sticky inflation, trying to determine which one the Fed will prioritize. Subconscious market volatility highlights the risks of evaluating based on single initial jobless claims data, especially considering the strong performance of the recent non-farm payroll report.