The Commercial Real Estate Alpha Site

U.S. jobless claims surged to their highest level in nearly four years, with 263,000 people filing for unemployment benefits last week. The uptick suggests cracks in the labor market that had, until recently, remained resilient despite higher interest rates. For the Fed, this is a flashing yellow light: weakening jobs could add urgency to cut rates, even as inflation remains sticky.

Taken together with other softening economic signals, the rise in claims underscores the tricky balancing act for policymakers. Investors are now weighing whether the Fed will prioritize stabilizing the labor market over keeping rates high to crush inflation. The jobs data may be an early sign that the “soft landing” narrative is harder to sustain than hoped.