US continuing jobless claims were 1.821 million for the week ending 10 April. The forecast was 1.82 million.
The reported figure was 0.001 million higher than the forecast. This equals a difference of about 1,000 claims.
We saw an early warning sign when continuing jobless claims data from April 10, 2025, showed a slight miss against forecasts. That figure, at 1.821 million, was a subtle signal of a cooling labor market. This began a slow but steady trend that influenced Federal Reserve policy discussions throughout the rest of that year.
That trend has now become much clearer, with the most recent report showing continuing claims have climbed to 1.95 million. This persistent softness in the labor market prompted the Fed to initiate its rate-cutting cycle, with two cuts so far this year bringing the federal funds rate to a target range of 4.50%. The market is now absorbing this new reality of slower growth, reflected in the latest Q1 GDP report of a sluggish 1.8%.
Given this environment, we expect volatility to remain a key theme for the next several weeks. The CBOE Volatility Index, or VIX, has been hovering near 18, which is noticeably higher than the calmer periods we experienced back in 2024. This suggests traders should consider buying protection, such as long puts on major indices like the SPY, to hedge against further economic weakness.
Positions should also be taken based on the clear direction of monetary policy. Fed funds futures are currently pricing in a greater than 60% chance of another rate cut by the September FOMC meeting. This makes derivatives tied to interest rates, like options on Treasury bond futures, an attractive way to trade the Fed’s dovish stance.
