Oxford Economics chief economist Ryan Sweet joins Seana Smith and Brad Smith on Morning Brief to discuss weekly jobless claims released Thursday morning and what it means for next week’s expectations for interest rate cuts from the Federal Reserve.
Initial jobless claims came in at 230,000, a 2,000 increase from the previous week’s level and above expectations, as the average estimate was 227,000.
Jobless claims were “below that break-even level, which is consistent with no monthly job growth,” Sweet said, noting that in his view, this is “a good sign for the Fed that even though the labor market has risen, it's not because of a lot of layoffs,” which is “an encouraging sign" for officials ahead of the September FOMC meeting.
Sweet says labor market data is a “slam dunk” that the Fed will cut 25 basis points next week. He believes that while Fed officials will likely be on the same page about the first cut given this week’s economic data, Sweet expects “a lively discussion” about whether the subsequent cuts are 25 or 50 basis points.
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This post was written by Naomi Buchanan.