Investors were subjected to an epic mish-mash of economic data on Thursday. Since Friday's payrolls report is on everyone's mind, let's begin with the labor market.
First, 206,000 U.S. workers joined the queue outside the unemployment office last week, a 1% uptick from the prior week, and 1,000 more than analysts expected.
Ironing out weekly volatility, the four-week moving average of initial claims continues to move sideways, but with a slight upward bias.
The print suggests the labor market remains in low hire/low fire mode.
Speaking of "fire mode," outplacement firm Challenger, Gray & Christmas (CGC) reports that U.S. firms announced 52,881 layoffs in August.
That marks a 58% monthly increase, but also the lowest August reading since 2022.
There have been a total of 529,914 layoffs announced so far in 2026, down 41% from last year's January-to-August period, which was skewed by DOGE firings.
For the first month since February, artificial intelligence was not the leading reason cited for layoff decisions. Restructuring, economic conditions and closings were the top three causes, pushing AI to the fourth slot.
Even so, AI is responsible for 116,175 pink slips so far this year—or 22% of the total—and remains the leading reason cited for mass layoffs in 2026.
"What we’d like to see with low layoffs is an increase in hiring activity," writes Andy Challenger, labor and workplace expert at CGC. "While companies are making plans to hire more workers than last year, according to our numbers, it doesn’t appear those positions are being filled quickly.”
So far this year, jobs in the technology sector are most often in the crosshairs, responsible for 29.3% of all layoffs.
Back to the Labor Department's report, continuing jobless claims, reported on a one-week lag, crept 0.5% lower to 1.779 million, or 11,000 fewer than economists predicted.
The Labor Department also tossed in its revised take on second-quarter labor costs and productivity.
In the April-June period, unit labor costs —which gauge the average cost of labor per unit of output produced— revised down to 1.2% from 1.3% at a quarterly annualized rate.
Productivity —which measures average output per hour— was left unrevised at 1.4%.
All of the above is prologue to the Labor Department's employment report due tomorrow, which is expected to show the U.S. economy added 56,000 jobs in August, with the unemployment rate standing firm at 4.1%.
SPY•
