Last week's US initial jobless claims came in well below market expectations, providing some relief to Federal Reserve and other institutions' concerns about labor market distress. The Department of Labor reported on Thursday that seasonally adjusted initial jobless claims for the week ending September 20th totaled 218,000, marking the lowest level since mid-July. This represents a decrease of 14,000 from the previous week's upwardly revised figure and falls significantly below economists' forecast of 235,000. Continuing claims, lagging by one week, remained essentially flat with a slight decrease of 2,000 to 1.926 million.

This data release comes just one week after the Federal Reserve voted to cut interest rates. The Fed lowered the benchmark rate by 25 basis points to the 4%-4.25% range, marking the first rate cut since 2025. In its September 17th meeting statement, the Federal Open Market Committee (FOMC) indicated that the rate cut was partly motivated by "increased downside risks to employment."

Indeed, non-farm employment growth has nearly stagnated, and job openings have fallen to multi-year lows. However, despite a brief uptick in initial jobless claims earlier this month, overall data suggests that even as corporate hiring efforts have significantly weakened, employers remain reluctant to lay off workers.

It's worth noting that initial jobless claims data exhibits certain volatility, with Texas showing particularly pronounced fluctuations in recent weeks. According to non-seasonally adjusted data, the state's initial jobless claims decreased by nearly 7,000 last week.

Despite growing concerns about potential US economic slowdown in the second half of this year, recent economic data has generally performed solidly, with other reports released Thursday further confirming the economy's underlying resilience.

The Commerce Department released its third estimate of second-quarter Gross Domestic Product (GDP) on Thursday. As the most comprehensive measure of economic growth, second-quarter US GDP growth reached 3.8%. The report showed GDP data was revised upward by 0.5 percentage points from previous estimates, an adjustment larger than typical. The Bureau of Economic Analysis attributed this upward revision primarily to corrections in consumer spending data. In the first quarter, US GDP had declined 0.6%, slightly revised down from previous figures.

Personal consumption expenditures, which account for about two-thirds of the $30 trillion US economy, grew 2.5%, significantly higher than the second estimate of 1.6% and better than the first quarter's 0.6%. Another positive signal came from durable goods spending on aircraft, appliances, and computers, which increased 2.9% in August, far exceeding expectations of a 0.4% decline and showing marked improvement from July's 2.7% drop. Even excluding transportation categories, new orders for durable goods still rose 0.4%; excluding defense orders as well, the increase reached 1.9%.

Federal Reserve officials are closely monitoring economic data to assess future policy direction. Recent reports have largely painted an optimistic picture: even the weakest housing market has recently shown signs of recovery, with new home sales surging 20.5% in August, marking the largest increase since January 2022.

Despite the solid data, markets still expect the Federal Reserve to continue cutting rates twice more at its October and December meetings. Fed Chairman Powell noted in Tuesday's speech that "despite significant adjustments in US trade and immigration policies, as well as numerous changes in fiscal, regulatory, and geopolitical spheres, the US economy continues to demonstrate considerable resilience."

However, Powell also left room for further accommodative policy, stating that current policy still poses "moderate constraints" on economic growth.