The US Department of Labor reported that initial jobless claims for last week came in at 199,000, staying below 200,000 for the third straight week and remaining near a 57-year low. Challenger, Gray & Christmas announced that July job cuts fell 46.1 percent year-on-year to 33,429, the lowest level since July 2023 and a three-year low. Limited layoffs will continue to keep the unemployment rate low, with the July rate expected to hold steady at 4.2 percent, unchanged from June. Signs of a tight labor market pushed up the probability of a September rate hike in US short-term money markets.
Tight labor market raises probability of September rate hike, pushing policy rate up.
Rate hike expectations push bond yields up, lowering bond prices.
