Initial Jobless Claims What to Expect – 18/9/25
U.S. labor-market momentum gets a fresh read on Thursday, 18 September 2025 at 13:30 BST, when Initial Jobless Claims hit the tape. Following last week’s spike to 263k, the street is looking for 240k, while our base case is a softer-landing 250k, a partial unwind of holiday-related distortions but still above the summer trend.
Beyond the headline, we’ll focus on continuing claims, the four-week average, and any state-level breadth that confirms cooling demand for workers. With rates and the dollar sensitive to signs of slack, a print above consensus would typically favor a front-end rally, meaning lower Treasury yields and a softer USD, while a downside surprise would bolster the “resilient jobs” narrative into the next data run.
Initial Jobless Claims – Our Call
Our call: 250k (vs 240k consensus; 263k prior). We expect some mean-reversion from last week’s 263k spike, with this week’s initial claims around 250k—still above consensus but off the highs.
Why a still-elevated print
- Last week’s surge was real, not just noise. DOL reported 263k SA claims (4-yr high), with notable state drivers: Tennessee (+2,870, manufacturing layoffs), Connecticut (+2,270), New York (+1,683 across transport/warehousing, construction, arts), Illinois (+1,331). That breadth argues against a full snap-back to sub-240k in one week.
- But some give-back is likely. The DOL cautions that weekly claims are hard to seasonally adjust around holidays/school starts; Labor Day often distorts the SA factor. Mean-reversion toward ~250k fits that pattern.
- Coincident labor signals are softer:
- ISM Services employment stayed in contraction for a third month (46.5).
- Challenger announced 85,979 job cuts in Aug (+39% m/m).
- NFIB: hiring plans subdued; unfilled openings continue to decline. NFIB – NFIB Small Business Association+1
These point to a cooling labor demand backdrop that keeps claims from retracing too far.
- Continuing claims were 1.939m in the latest week available (Aug 30), stable but trending up vs spring; I’d look for a drift higher to 1.950m Consensus in tomorrow’s update .
Range & Risks
- Base: 245k–255k; print around 250k.
- Upside (>260k): more follow-through from manufacturing layoffs (see TN/IL) or fresh transport/warehousing cuts.
- Downside (<235k): if the prior spike was mostly seasonal-factor noise that fully unwinds (less likely given the state detail).
Market take (FX/rates)
- >consensus (≥250k): leans USD softer, front-end yields lower; watch USD/JPY downside and EUR/USD topside bleed.
- <consensus (≤235k): trims labor-weakness narrative → USD firmer, especially vs EUR/GBP ahead of next growth prints.
Bottom line:
We expect a cooling but not collapsing labor market to show through in a 250k claims print — slightly above street and consistent with broader evidence of softer hiring and rising layoffs, while unwinding some of last week’s holiday-skewed jump.
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