A drop in weekly jobless claims eases recession concerns for jittery markets.

A decrease in the number of Americans filing for unemployment benefits last week eased market concerns about a looming recession and the potential need for the Federal Reserve to implement aggressive policy measures.

Initial claims for state unemployment benefits dropped by 17,000 to a seasonally adjusted 233,000 for the week ending August 3, according to the Labor Department on Thursday. This marks the largest decline in approximately 11 months. Economists surveyed by Reuters had predicted 240,000 claims. The data suggests that concerns about a deteriorating labor market may have been overstated, with the gradual softening in employment conditions still in place.

Friday’s monthly nonfarm payrolls report revealed a significant slowdown in job gains for July, with the unemployment rate rising to 4.3%. This increase has heightened market concerns that the labor market may be weakening more rapidly, potentially necessitating decisive intervention from the Federal Reserve.

MARKET REACTION:

The yield on benchmark U.S. 10-year Treasury notes climbed to 3.99%, while the yield on two-year notes surged to 4.044%. Meanwhile, the dollar index increased by 0.27%.