The number of initial jobless claims filed for the week ending in August 3 fell to 233,000, coming in below the expected 240,000. The cooler-than-expected data is a sign of relief for investors after July's jobs report stoked recession fears and kicked off a three-day global market sell-off. Glenmede Chief of Investment Strategy and Research Jason Pride joins Catalysts to discuss the latest labor print and what it signals for major markets.

"We had a little bit of an economic surprise that people are still, I think, deciphering that employment report. I mean, even today with the jobless claims numbers, people are kind of looking back and questioning, well, how do you reconcile these two?" Pride explains. He adds that the Bank of Japan initiating an interest rate hike cycle threw markets into further turmoil as the yen carry trade unwinded. With these factors combined, Pride argues it kicked off "a series of dislocations in the market that probably will eventually turn out to be, when we look back, temporary in nature in terms of the pressures on the market."

He notes that market corrections of 5% or 10% are normal, explaining, "This is actually not that unusual, particularly if you think about what the market's been through. We were up 15% plus through June for the S&P 500 (^GSPC), so to see a 5% pullback on a 15% up year in just the first half, it actually feels a little bit from our perspective, a little bit healthy in nature. It resets valuations in a more kind of stable basis." Yet, Pride believes the economy is likely in a slowdown, and says it will be reflected in the second half of the year. However, he adds that at this point, a recession is not guaranteed as there needs to be more data pointing to increased economic weakness.

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This post was written. by Melanie Riehl