US Jobless Claims Plummet to 1969 Low, Hike Odds Soar

The US jobless claims have dropped to their lowest level since September 1969, hitting 187,000 for the week ending July 18. This significant decline has hardened bets that the Federal Reserve (Fed) could raise interest rates at next week's meeting.

The CME FedWatch tool now puts the odds of a hike at 33.7%, up from 11.8% a week earlier, reversing rate cut hopes that lifted crypto earlier this month. Economists surveyed by Reuters had expected claims to rise to 212,000, but the actual drop was the largest in three months.

Matthew Martin, senior US economist at Oxford Economics, said the low level of claims is hard to overlook. He noted that a few layoffs and stronger hiring should cap unemployment in the coming months, potentially even dragging the rate below its current 4.2%.