Jobless Claims Presage Rate Hikes? 

The jobless claims report that came through on Thursday had some implications perhaps even before the more important jobs report on Friday.

Key takeaways:The jobless claims stand at a four-decade low, according to The Wall Street Journal and other sources.

What does this mean for rates? The jobless claims report may be only part of the story, but overall, unemployment filings were at levels not seen since the early 1970s. In the latest information, jobless claims were down by 5,000 for the week that ended on Oct. 1, as calculated by the Labor Department, to 249,000. That was better than forecasts that looked for a level of 256,000 claims.

This continues a trend seen for more than a year as jobless clams have been below the 300,000 threshold for 83 weeks. As reported by Bloomberg, the labor market has been tightening steadily, and against that backdrop the Federal Reserve might raise ket benchmark rates sooner rather than later.

Looking ahead to Friday’s data, the Labor Department data is slated to show a boost in job gains to as many as 172,000 to nationwide payrolls. The unemployment rate is expected to hold at just under five percent, as calculated by Bloomberg.

The continued improvement in the employment picture portends that that wages may go up, and thus prices for goods and services would go up. And this means that inflation may be on the horizon — enough to push the Fed to boost rates.