Historic low layoffs underpin US labor market; factory gate price pressures rising
SPY•US initial jobless claims fell 1,000 to 197,000, near a 57-year low, while continuing claims dropped 11,000 to 1.701 million, their lowest since April 2023. An ISM survey showed manufacturing input prices rose to 77.9 in September from 71.1 in August.
1. Claims remain near lows
Initial claims for state unemployment benefits slipped to 197,000 in the week ended September 26, below economists’ 200,000 forecast. Claims have remained below 200,000 for three straight weeks. Challenger, Gray & Christmas reported announced layoffs at US-based employers fell 18% in September to 43,281, while hiring plans rose to 90,787 but were down 23% from a year earlier.
2. Factory prices climb
The Institute for Supply Management’s measure of manufacturing input prices rose to 77.9 in September from 71.1 in August, and survey respondents cited pricing volatility, tariffs, the Middle East conflict and longer lead times. Continuing claims fell to 1.701 million in the week ended September 19, the lowest since April 2023.
3. Rate expectations ease
Economists said low layoffs coexisted with cautious hiring. Markets priced in a 37.1% chance of another rate increase at the Federal Reserve’s October 27-28 meeting, down from 68.6% a week earlier. The claims data fall outside the survey period for September’s employment report.
