Weekly jobless claims fall to 197,000, fifth straight decline; December Fed-hike odds climb to 86%

What happened

Initial weekly jobless claims fell to 197,000, down from a revised 199,000 the prior week and below economists' expectations of 200,000, marking a fifth consecutive weekly decline. The continued 'low-fire' labor-market reading keeps pressure on the Federal Reserve to increase interest rates: CME FedWatch now shows a 22% likelihood of a hike at the late-October meeting and an 86% likelihood of at least a quarter-point hike in December, up from 18% and 80% respectively the day before. The 10-year Treasury yield held at 5.30%, up a basis point from Wednesday's close, after touching 5.37% earlier in the week.

Who’s affected

• Rate-sensitive equities broadly (banks, REITs, homebuilders, high-multiple growth via higher-for-longer yields)
• Energy and industrials via the inflation-complicating oil leg

Sources

investopedia.cominvestors.com