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Pre-market futures are up at this hour, breaking higher following this morning’s economic data. These happen to be important reports: Consumer Price Index (CPI) and Weekly Jobless Claims. Taken together, we understand how market participants are putting money to work in equities ahead of the opening bell.
Futures dipped initially on this data, but quickly rebounded. The Dow is currently +158 points, the S&P 500 +19 and the Nasdaq +80 points. This comes after yet another all-time closing high for both the S&P and the Nasdaq. The small-cap Russell 2000 is +10 points at this hour.
Bond yields continue to erode in the wake of this data — and you know what this points to: the Fed lowering interest rates from their current 4.25-4.50% for the first time in 2025. The 10-year yield is now down to +4.00% and the 2-year is +3.48%. We stopped talking about the 30-year bond yield since it has pulled way back from +5%.
Initial Jobless Claims: 263K, Highest in Almost 4 Years
Because the narrative regarding next week’s Fed meeting has rested on a seriously weakening labor market, today’s Initial Jobless Claims headline seals the deal: +263K new claims last week takes out the multi-year high from back in October of last year — all the way back to October of 2021. This is much higher than the +235K expected, and the downwardly revised +236K from the prior week.
Can we see any anecdotal evidence which backs up such a big jump? Not necessarily week by week, but in general we’ve seen 4-figure layoffs going back to this spring and summer that did not seem to appear in jobless claims data: -10K jobs at Intel (INTC - Free Report) , -9K at Microsoft (MSFT - Free Report) and -8K at IBM (IBM - Free Report) , just to name a few. These can be found in Zacks Chief Economist John Blank’s latest Economic Outlook report, which you can read here.
Continuing Claims is a different story. For the first time in almost three months, we’re below 1.94 million — if just barely: 1.939 million, identical with the downward revision for the previous week. Keep in mind Continuing Claims report a week in arrears from new claims, and barring an enormous revision from today’s Initial Claims headline, we can expect this number to move back over 1.94 million a week from now.
CPI Mostly In-Line: Inflation Rate +2.9%
The August Consumer Price Index (CPI) report is out ahead of today’s open, with all but one of the series of headline data a tad warmer than expected. Everything else was just where analysts had forecast. Headline CPI reached +0.4%, up 10 basis points (bps) from +0.3% anticipated and double the +0.2% reported a month ago. Core CPI came in at +0.3%, in-line with estimates and the prior month’s core headline.
Year over year CPI is also known as the Inflation Rate, and this also was as expected: +2.9%, up +20 bps from the July print. This is still off the +3.0% we saw in January, but more than half a point higher than April’s recent low +2.3%. Core CPI year over year was +3.1% — in-line with expectations and the previous month’s read. It’s also still notably warmer than the Fed’s optimal +2.0% inflation rate.
Thus far, tariff policy has not notably manifest itself in these inflation numbers — neither today’s retail CPI nor yesterday’s Producer Price Index (PPI), the wholesale side of the coin. Rates of +0.3% on a monthly basis are usdually seen as par for the course. And although Econ 101 students can tell you these tariff costs did not dissolve into thin air and we'll see them eventually show up somewhere, currently it’s the jobs data driving the bus.
What Does This Mean for Next Week’s Fed Meeting?
It’s no longer a question whether the Fed will be cutting interest rates at its upcoming Federal Open Market Committee (FOMC) meeting next week (September 16-17), but whether it will be by 25 bps or 50. Recall this time a year ago, the Fed began a short series of rate cuts starting with -50 bps in September 2024. Cutting an additional 25 bps at the October and December FOMC meetings is now at the highest level of probability.
If we see this transpire a second year in a row, we would be exiting 2025 with interest rates at 3.25-3.50%, where we haven’t been for three years (when we were headed in very much the opposite direction). It’s unclear how this directly would affect a limping jobs market, but it may bolster banking, housing and any other market that could take advantage of lowering rates. Questions or comments about this article and/or author? Click here>>
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Jobless Claims Spike to +263K, CPI Mild & In-Line
Thursday, September 11, 2025
Pre-market futures are up at this hour, breaking higher following this morning’s economic data. These happen to be important reports: Consumer Price Index (CPI) and Weekly Jobless Claims. Taken together, we understand how market participants are putting money to work in equities ahead of the opening bell.
Futures dipped initially on this data, but quickly rebounded. The Dow is currently +158 points, the S&P 500 +19 and the Nasdaq +80 points. This comes after yet another all-time closing high for both the S&P and the Nasdaq. The small-cap Russell 2000 is +10 points at this hour.
Bond yields continue to erode in the wake of this data — and you know what this points to: the Fed lowering interest rates from their current 4.25-4.50% for the first time in 2025. The 10-year yield is now down to +4.00% and the 2-year is +3.48%. We stopped talking about the 30-year bond yield since it has pulled way back from +5%.
Initial Jobless Claims: 263K, Highest in Almost 4 Years
Because the narrative regarding next week’s Fed meeting has rested on a seriously weakening labor market, today’s Initial Jobless Claims headline seals the deal: +263K new claims last week takes out the multi-year high from back in October of last year — all the way back to October of 2021. This is much higher than the +235K expected, and the downwardly revised +236K from the prior week.
Can we see any anecdotal evidence which backs up such a big jump? Not necessarily week by week, but in general we’ve seen 4-figure layoffs going back to this spring and summer that did not seem to appear in jobless claims data: -10K jobs at Intel (INTC - Free Report) , -9K at Microsoft (MSFT - Free Report) and -8K at IBM (IBM - Free Report) , just to name a few. These can be found in Zacks Chief Economist John Blank’s latest Economic Outlook report, which you can read here.
Continuing Claims is a different story. For the first time in almost three months, we’re below 1.94 million — if just barely: 1.939 million, identical with the downward revision for the previous week. Keep in mind Continuing Claims report a week in arrears from new claims, and barring an enormous revision from today’s Initial Claims headline, we can expect this number to move back over 1.94 million a week from now.
CPI Mostly In-Line: Inflation Rate +2.9%
The August Consumer Price Index (CPI) report is out ahead of today’s open, with all but one of the series of headline data a tad warmer than expected. Everything else was just where analysts had forecast. Headline CPI reached +0.4%, up 10 basis points (bps) from +0.3% anticipated and double the +0.2% reported a month ago. Core CPI came in at +0.3%, in-line with estimates and the prior month’s core headline.
Year over year CPI is also known as the Inflation Rate, and this also was as expected: +2.9%, up +20 bps from the July print. This is still off the +3.0% we saw in January, but more than half a point higher than April’s recent low +2.3%. Core CPI year over year was +3.1% — in-line with expectations and the previous month’s read. It’s also still notably warmer than the Fed’s optimal +2.0% inflation rate.
Thus far, tariff policy has not notably manifest itself in these inflation numbers — neither today’s retail CPI nor yesterday’s Producer Price Index (PPI), the wholesale side of the coin. Rates of +0.3% on a monthly basis are usdually seen as par for the course. And although Econ 101 students can tell you these tariff costs did not dissolve into thin air and we'll see them eventually show up somewhere, currently it’s the jobs data driving the bus.
What Does This Mean for Next Week’s Fed Meeting?
It’s no longer a question whether the Fed will be cutting interest rates at its upcoming Federal Open Market Committee (FOMC) meeting next week (September 16-17), but whether it will be by 25 bps or 50. Recall this time a year ago, the Fed began a short series of rate cuts starting with -50 bps in September 2024. Cutting an additional 25 bps at the October and December FOMC meetings is now at the highest level of probability.
If we see this transpire a second year in a row, we would be exiting 2025 with interest rates at 3.25-3.50%, where we haven’t been for three years (when we were headed in very much the opposite direction). It’s unclear how this directly would affect a limping jobs market, but it may bolster banking, housing and any other market that could take advantage of lowering rates.
Questions or comments about this article and/or author? Click here>>