AI has not yet disrupted the labor market, and initial jobless claims in the United States have seen a slight increase, still close to a two-year low.

According to the weekly statistics data as of last week, the number of initial claims for unemployment benefits in the United States increased slightly less than economists' expectations, with a slight increase compared to the previous value. This indicates that the number of layoffs in US companies is still relatively low, and under the pessimistic outlook of "AI disrupting everything," the US labor market is showing strong resilience, continuing to remain significantly lower than the average level of the past two years. At the same time, the continued claims for unemployment benefits, which serve as a key indicator of the flow of unemployed individuals in the US, unexpectedly decreased by 31,000 people from the previous week to 1.833 million people, reaching one of the lowest levels in nearly 10 months. The latest data released by the US Department of Labor on Thursday shows that the AI wave has not disrupted the job market as drastically as the "Anthropic storm" hit the software sector. In the week ending February 21, the number of initial claims for unemployment benefits increased by only about 4,000 people to 212,000. The median expectation from a survey of economists was 216,000 people. This statistical period included the Presidents' Day holiday. The number of continued claims for unemployment benefits - a proxy indicator measuring the number of people receiving benefits - decreased to 1.83 million people from the benchmark of the previous week. Although the number of layoffs is lower and the pace of hiring has significantly slowed down, these data still reflect the stability of the US labor market and reinforce the narrative logic of a "soft landing." As shown in the chart above, the number of initial claims for unemployment benefits increased slightly at the start of the holiday season, while the number of continued claims unexpectedly decreased to 1.83 million people. Around the holiday season, claim data may fluctuate. However, the level of initial claims for unemployment benefits is relatively moderate, further confirming the recent stabilization of the US labor market as shown in some other recent data, and the US economy is getting closer to the "soft landing" scenario that the Federal Reserve has been longing for. The February US non-farm employment report, to be released on March 6th, will help Federal Reserve policymakers make a clearer assessment of whether the strong non-farm employment growth in January and the downward trend in the unemployment rate reflect temporary optimistic changes or a sustained positive trend in the non-farm job market and the entire US economy. The four-week moving average number of initial claims for unemployment benefits, which helps smooth out sharp fluctuations, remained basically flat last week at 220,250. Before seasonal adjustment, the number of initial claims for unemployment benefits decreased to its lowest level since September last week, with Michigan, New York, and Ohio seeing the largest declines. Although there has been no surge in layoffs and prices are in a cooling trend, the Federal Reserve remains in a wait-and-see mode. Based on the latest combined data, the outlook for rate cuts by the Federal Reserve has been recalibrated to "can cut, but not in a hurry." On one hand, the year-on-year CPI fell to 2.4% and core CPI fell to 2.5% in January, indicating that inflation is continuing to decline; on the other hand, the number of initial claims for unemployment benefits rose to 212,000, while the number of continued claims dropped to 1.83 million, in addition to the addition of 130,000 non-farm jobs in January and the unemployment rate falling to 4.3%, all indicating that the labor market has not deteriorated to the point where the Federal Reserve needs to "urgently intervene." In terms of monetary policy implications, this set of data weakens the necessity of an "immediate rate cut," but leaves room for "continuing rate cuts" later in the year. Therefore, the latest change in the rate cut path in the market seems more like shifting the timing from "immediate" to "more reasonable mid-year." Market reaction after the CPI data release shows that federal funds rate futures have raised the probability of a rate cut in June to close to 70%, up from about 64% before the data release; at the same time, the market is pricing in a loosening of about 64 basis points for the whole year, indicating the possibility of two rate cuts this year - market pricing shows that the second rate cut by the Federal Reserve could occur in October. After today's release of the initial claims for unemployment benefits data, there has been no significant change in rate cut expectations. This also means that job market resilience remains, layoffs have not significantly increased, so the Federal Reserve does not have the conditions to take action on a rate cut in March, May is not necessarily ripe, and June is still the most likely "window" for a rate cut. In other words, the expectation for a rate cut has not been removed, but continues to be "pushed back." From the recent collective statements of Federal Reserve officials, the policy function is still "inflation first, followed by downward risks to employment."