The number of individuals filing for unemployment benefits soared more than predicted last week, suggesting emerging weaknesses in the labor market.

Jobless claims rose from 209,000 to 231,000 for the week that ended on May 4, marking the highest level since August of the previous year, according to data released by the Department of Labor. This rise ended a sequence of four weeks when the figures were consistently below expectations, and it was higher than the anticipated 210,000 print.

The four-week moving average of initial claims, which reduces the volatility of weekly data, increased by 4,750, reaching 215,000. On an unadjusted basis, the claims went up by 19,690 to 209,324, with notable increases in several states: New York saw an increase of 10,248, California 4,198, Indiana 2,439, and Illinois 2,003.

These figures strengthen the perception that the U.S. labor market’s momentum is diminishing, as highlighted by the recent employment report, which indicated a slower-than-expected growth in nonfarm employment and a surprising increase in the unemployment rate.

Read also: Jobs Growth Slows, Unemployment Ticks Up, Wage Increase Cools: ‘The Market Should Love This Report’

Market reactions

Following the release of the unemployment claims data, the U.S. Dollar saw a significant drop. The U.S. Dollar Index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF , decreased by 0.3%.

Expectations for Federal Reserve interest rate cuts increased, with the probability of a cut in September rising to 67.9% and with traders now fully pricing in two rate cuts by the end of the year.

Rate-sensitive 2-year Treasury yields moved slightly lower to 4.82%,

Stocks edged higher in the first hour of trading in New York. The S&P 500, tracked by the SPDR S&P 500 ETF Trust ( SPY ) , was up 0.2%.

The Dow Jones Industrial Average outperformed, with an increase of 0.3%, while the Nasdaq 100 and the Russell 2000 remained flat.

Chart: Dollar Tumbles After Higher-Than-Expected Unemployment Claims Data

Now Read: Bank Of England Signals Imminent Rate Cuts: ‘More Than Currently Priced Into The Market’