The weekly jobless claims have fallen to its lowest level in over three years, a development that could allay fears over a weakening labor market. This comes ahead of the FOMC meeting, where the Fed is likely to lower rates, which is a positive for Bitcoin and the broader crypto market.
U.S. Weekly Jobless Claims Come In At 191K Ahead of FOMC Meeting
Department of Labor data show that initial claims were 191,000 for the week ending November 29, down 27,000 from the previous week’s revised level. This also marked the lowest level for initial claims since September 24, 2022, when it was 189,000.
This labor report comes just a day after the ADP report showed that private payrolls fell by 32,ooo in November, the biggest drop since March 2023. The report had further strengthened the case for another rate cut at next week’s FOMC meeting.
However, this latest weekly jobless claims could allay fears over a sharp decline in the labor market. According to a Reuters report, economists currently view the labor market as being in a “No fire, no hire” state.
Meanwhile, market experts such as Mohamed El-Erian noted that labor market data is inherently volatile around holiday weeks, such as Thanksgiving last week. As such, there is the possibility that this is just a ‘seasonal noise’ which is masking the cooling labor market. This is significant as Fed officials head into next week’s FOMC meeting, contemplating whether to prioritize the softening labor market or rising inflation.
What Are The Odds Of A Rate Cut Next Week?
The odds of a rate cut at next week’s Fed meeting have remained steady amid the release of the weekly initial jobless claims. CME FedWatch data shows that there is currently a 89.2% chance of the Fed lowering rates by 25 basis points (bps).
Source: CME FedWatchWith the initial jobless claims now out of the way, attention will turn to the PCE inflation data, which drops tomorrow. The PCE is the Fed’s favorite inflation gauge and would provide insight into whether inflation is rising sharply, as some Fed officials have warned.
A lower-than-expected inflation reading would provide the final boost heading into next week’s FOMC meeting. Notably, Bitcoin and the broader crypto market have recovered in anticipation of a third rate cut this year.
Source: https://coingape.com/u-s-weekly-jobless-claims-fall-to-3-year-low-ahead-of-fomc-meeting/
