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the number of first-time applications for unemployment benefits fell to the lowest level since early july last week, and the number of people continuing to receive unemployment benefits also fell to the lowest level in nearly three months.

on thursday, september 5, the u.s. department of labor released data showing that the number of first-time unemployment claims in the united states in the week ended august 31 was 227,000, lower than the expected value of 230,000 and the previous value of 231,000. the number of first-time unemployment claims without seasonal adjustment was at its lowest level in 10 months.

the number of people continuing to apply for unemployment benefits also fell to a three-month low of 1.838 million, which was also lower than the expected 1.869 million. both indicators fell slightly from the previous value.

at the same time, the u.s. adp employment in august unexpectedly fell to 99,000, a three-and-a-half-year low, showing a sign of a weak job market. the two employment data are mixed, and the market is looking forward to the release of non-agricultural data tomorrow night, trying to find more signals about the extent of the fed's interest rate cut in september.

after the release of the u.s. initial claims data, the three major u.s. stock index futures rose in the short term. the nasdaq futures narrowed their intraday decline to 0.30%, the s&p 500 futures narrowed their decline to 0.07%, and the u.s. dollar index narrowed its intraday decline to 0.21%, having previously fallen below 101 and now at 101.75.

weak employment data has markets again betting on a sharp rate cut by the fed in september

in the view of evercore's stan shipley, adp private payrolls and other labor market indicators point to "soft hiring" in august.

“tomorrow’s jobs report could be softer than expected given the slowdown in adp estimates,” said jeffrey roach of lpl financial. “if the jobs report surprises investors and is weaker than expected, the odds of a 50 basis point rate cut at the upcoming fed meeting would increase.”

bret kenwell of etoro said that after last month’s disappointing jobs report, it was no surprise that investors were “skeptical” ahead of friday’s employment data, “especially as we’ve returned to an environment where ‘good news is good news and bad news is bad news’.”

“while a 25 basis point rate cut at the fed’s september meeting is now more likely, a disappointing jobs report on friday could increase the odds of a 50 basis point cut,” kenwell noted:

“a 50 basis point rate cut would appear to be good news for stock bulls. however, if the fed feels forced to cut rates by 50 basis points outright, it could be a sign that concerns about the job market are greater than previously acknowledged.”