New US jobless claims slipped to a seasonally adjusted 197,000 for the week ended September 19, holding near 57-year lows according to Labor Department data released Thursday. The resilience in the labor market comes as August new home sales jumped 6.4% despite climbing mortgage rates.
New claims for US unemployment benefits decreased by 1,000 to a seasonally adjusted 197,000 for the week ended September 19, according to a Labor Department report issued Thursday, September 24, 2026. Economists polled by Reuters had previously forecast 201,000 weekly claims. The latest figures place claims near levels last observed in 1969, suggesting the domestic labor market has regained momentum after a sluggish summer.
The underlying data points to persistent worker retention by employers. Low layoffs account for much of the labor market stability, with companies not in a rush to boost headcount,
according to reporting from the Labor Department figures. While businesses continue to hoard current workers amid economic headwinds from the ongoing US-Israeli war and import tariffs, hiring remains restrained by lingering worker shortages tied to retirements and immigration enforcement.
Federal Reserve Rate Expectations and Treasury Yields
Labor market stability has reinforced market expectations that the Federal Reserve could raise interest rates before the end of the year. The central bank raised its overnight benchmark interest rate by 25 basis points last week, moving it to the 3.75%-4.00% range in its first rate hike in three years. CME’s FedWatch tool indicated investors are pricing in a 64.2% probability of an additional rate increase at next month’s meeting.
Financial markets reacted to the shifting monetary policy and rising oil prices on Thursday. US stocks traded lower, the US dollar strengthened against a basket of currencies, and Treasury yields climbed. The yield on the 30-year bond increased to just over 5.45%, marking its highest level since 2004.
More than a year ago, weak labor demand and a rising unemployment rate had Fed officials focused on balancing downside risk to employment with upside risk to inflation. But at least for now, stable labor market data have convinced most Fed officials that downside employment risks have been so diminished that focus can shift entirely toward inflation.
Andrew Hollenhorst, chief U.S. economist at Citigroup
August New Home Sales Surge Despite Freddie Mac Mortgage Rate Hikes
In the housing sector, new single-family home sales jumped 6.4% in August to a seasonally adjusted annualized rate of 684,000 units, according to the Commerce Department’s Census Bureau. The figure surpassed the 615,000-unit rate projected by economists and reached its highest mark since December 2025, even as a National Association of Home Builders survey showed more builders turning to price cuts and incentives to attract buyers.
Mortgage costs continued to climb in tandem with surging Treasury yields. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 7.03% for the week, up from 6.95% the previous week and its highest level since January 2025. Mortgage rates have climbed more than 100 basis points since the Iran conflict began at the end of February.
Affordability pressures prompted builders to adjust pricing. The Census report showed the median price for a new house dropped 5.8% in August to $393,700 compared to the same period a year earlier. Despite the price reductions, the total inventory of unsold new houses remained unchanged at 483,000 units, with more than half still under construction. At August’s sales pace, clearing that remaining supply would take 8.5 months, an improvement from 9.0 months in July.
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