US jobless claims rise to 206,000

That matters because low layoffs are still preventing a sharper rise in unemployment even as businesses remain reluctant to add staff. Challenger, Gray & Christmas said announced hiring plans jumped 37% in the first eight months of the year from the same period last year, but noted those openings are not being filled quickly. At the same time, announced layoffs climbed 58% in August to 52,881, though they are still down 41% year to date from last year.

The picture from the Federal Reserve’s Beige Book was similarly mixed, saying employment rose “very slightly” in August. It said labor demand was healthiest in manufacturing, construction and some service industries, while retail and hospitality saw weaker demand.

Continuing claims, which track people already receiving benefits and serve as a proxy for hiring difficulty, increased by 8,000 to 1.779 million in the week ended Aug. 22. The data do not feed into Friday’s August payrolls report, but they point to a labor market that is cooling rather than cracking.

For investors, the claims number supports the view that the economy is slowing without tipping into recession, a setup that has kept Treasury traders focused on the path of Fed policy rather than on imminent growth stress. SPY has pushed to 773.15, while TLT traded at 82.07, with recent price action reflecting expectations that rates will remain sensitive to incoming labor data.

Friday’s nonfarm payrolls report will be the next major catalyst. Economists expect a 56,000-job rebound after July’s 23,000 decline, with the unemployment rate seen unchanged at 4.1%, though some analysts say another negative reading cannot be ruled out after the end of Temporary Protected Status for some Haitian workers.