US Jobless Claims Slightly Increase

Investing.com – The number of Americans filing for first-time unemployment claims edged up slightly last week, breaking a three-week streak of declines, as possible distortions from recent devastating hurricanes waned.

Hurricanes Helene and Milton in the US South, along with a now-ended strike at aerospace giant Boeing (NYSE:BA), helped keep applications elevated in mid-October.

Initial jobless claims climbed to 221,000 in the week ending Nov. 2, up from an upwardly-revised 218,000 in the previous week, according to Labor Department data. The earlier return had seen the figure at 216,000, marking its lowest since May.

Economists had predicted a reading of 223,000. The four-week average of jobless claims, which accounts for weekly variances, dipped to 227,250, down from 237,000.

The Federal Reserve will likely be monitoring the labor market closely as policymakers conclude a two-day meeting with a significant interest rate decision on Thursday. In September, the Fed cut rates by an outsized 50 basis points, citing the need to support the labor market during fading inflationary pressures.

Markets widely expect a further quarter-point decrease in borrowing costs this month in the key fed funds rate, ranging from 4.75% to 5%.

Futures contracts linked to the Fed's policy rate are also factoring in an additional rate cut in December, although such expectations were slightly dampened following Donald Trump's victory in the 2024 presidential election.

In the aftermath of the election, traders now anticipate the Fed will implement only two more cuts next year, lowering rates to a band of 3.75% to 4%. If this occurs, it would mark the end of the Fed's long-anticipated rate-cutting cycle a year earlier than many had expected, and a percentage point higher than some policymakers' projections.