LIVE MARKETS-All in the timing: Upbeat claims, Philly Fed numbers follow 2025's first rate cut

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ALL IN THE TIMING: UPBEAT CLAIMS, PHILLY FED NUMBERS FOLLOW 2025's FIRST RATE CUT

The day after Powell & Co implemented an economically stimulative interest rate cut - the first such cut this year - data pointed to a U.S. economy on the upswing.

Last week, 231,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI 12.5% fewer than the previous week and landing 9,000 shy of analyst expectations.

Even so, ironing out weekly volatility, the four-week moving average of initial claims continues to drift sideways in the 240,000 zone, which is near the upper end of the range associated with healthy labor market churn.

"Initial claims remain on the most gradual of upward trends," writes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "Leading indicators present a mixed picture on the outlook for layoffs."

"Accordingly, we continue to expect the unemployment rate to remain on its gradual upward trend, peaking at 4.75% early next year."

Ongoing jobless claims USJOBN=ECI reported on a one-week lag, edged 0.4% lower to 1.920 million, or 30,000 shy of consensus. Even so, continuing claims remain high, supporting consumer survey data that suggests laid off workers are finding it increasingly difficult to find a replacement gig.

While continuing claims have started to abate, they are "still elevated," says Nancy Vanden Houten, lead U.S. economist at Oxford Economics, who adds that current levels are "consistent with a slow pace of job creation."

Turning to the manufacturing sector, Atlantic region factory activity has kicked into high gear this month, at least according to the Philadelphia Federal Reserve.

The Philly Fed business index USPFDB=ECI rose in September to its highest reading since January, bounding from -0.3 in August to 23.2 and blasting past the languid 2.5 consensus.

New orders and shipments bounced into expansion and employment continued to grow, while the prices paid index - an inflation predictor - pulled back from last month's multi-year high, falling 20 points to 46.8.

On net, survey respondents expect growth over the next six months, according to the press release.

The report stands in stark contrast with Monday's Empire State data, which unexpectedly dipped into negative territory. The disparity suggests tariffs aren't hitting regional goods-makers equally.

A positive Philly Fed/Empire State number indicates a monthly growth, while a negative print signifies contraction.

(Stephen Culp)

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