In a show of strength, the S&P 500 (SPX) is rising and has erased its morning losses despite two concerning labor-market data releases.
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Initial jobless claims, or the number of people filing new unemployment benefit applications, totaled 248,000 for the week ended June 7, higher than the estimate for 242,000 and unchanged from the prior week. The figure has mostly consolidated in a range between 200,000 and 250,000 since late 2020, with the current number at the high end of the range and the highest since October. That could spell trouble given persistent economic uncertainty and tariff fears.
Continuing Jobless Claims Above Expectations
Furthermore, continuing jobless claims are at their highest level since November 2021 in another worrying sign. For the week through May 31, 1.956 million people continued to file for unemployment benefits, above the 1.910 million estimate and increasing from 1.904 million week-over-week. That’s a sign that unemployment is increasing and that finding a new job is taking longer.
With inflation cooling down and jobs at risk, the Fed has even more reason to cut rates and stimulate the economy. That could provide a boost to the stock market as well.
The S&P 500 is up by 0.13% at the time of writing.
