The latest data on initial unemployment claims showed a sharp drop in the number of new applications for unemployment benefits in the United States, marking the largest drop in a year, showing a recovery in the job market.

According to the latest data from the U.S. Department of Labor, the number of initial unemployment claims in the week ending August 3 was 2.33 million, lower than the expected 2.40 million and lower than the previous value of 2.49 million.

However, the number of people continuing to apply for unemployment benefits rose to 18.75 million in the week ending August 3, the highest level since November 2021. The four-week moving average of continuing unemployment claims also hit a new high.

The data showed that the decline in unemployment claims was mainly due to a decrease in applications in states such as Michigan, Missouri and Texas, which have experienced a sharp increase in applications in recent days.

In addition, a series of economic data released by the United States last week showed that the labor market is still cooling, especially the employment data in July, which triggered financial market concerns that the economy may be heading for a recession.

After the release of the initial unemployment claims data, concerns about the labor market cooling too quickly may be alleviated. Some analysts believe that the decline in the number of initial claims may help calm the market, indicating that the labor market is returning to its pre-epidemic state.

A report said, "The data needs to pay attention to whether there are further signs of a significant weakening of the labor market, which will have an impact on the Fed's policy. They show a moderate slowdown in the economy, not a contraction!"

At the same time, most Fed analysts still expect Fed policymakers to begin a moderate interest rate cut of 25 basis points at the mid-September meeting.