12:15 PM EDT, 09/12/2024 (MT Newswires) -- Weekly applications for unemployment insurance in the US increased unexpectedly, government data showed Thursday, as the Federal Reserve prepares to begin lowering interest rates next week.

The seasonally adjusted number of initial claims rose by 2,000 to 230,000 in the week ended Sept. 7, according to the Department of Labor. The consensus was for a 227,000 level in a survey of analysts compiled by Bloomberg. The previous week's reading was revised up by 1,000 to 228,000.

The four-week moving average came in at 230,750, moving higher by 500 from the prior average that was revised upwards by 250. Unadjusted claims fell 12,968 on a weekly basis to 177,663.

"After some noise earlier in the summer, initial jobless claims have settled into a tight range over the last several weeks," Oxford Economics Senior US Economist Nancy Vanden Houten said in remarks emailed to MT Newswires.

For the week ended Aug. 31, seasonally adjusted continuing claims totaled 1.85 million, in line with the Bloomberg consensus. Continuing claims advanced by 5,000 from the previous week's average, which was revised up by 7,000. The four-week moving average came in at 1.85 million, falling by 2,250 from the prior week's upwardly revised average, according to the DOL.

"We expect continued claims, which track initial claims, to drift a little lower in the weeks ahead," Vanden Houten said.

Massachusetts saw the highest increase in initial claims for the week ended Aug. 31, at 2,230, followed by Wisconsin and Ohio. The largest decrease was in Texas, where claims declined by 1,396, followed by New York and North Dakota.

On Wednesday, the Bureau of Labor Statistics reported that US consumer inflation rose as expected in August on a sequential basis, while the annual metric logged the smallest increase since February 2021. Last week, government data showed that the economy added fewer jobs than expected in August, while the unemployment rate ticked down.

"The Fed has committed to a rate cut at its meeting next week to guard against labor market weakness, but there is nothing in the claims data to warrant more than a (25-basis-point) cut, which continues to be our baseline forecast," Vanden Houten said in the Thursday remarks.

There is a roughly 85% chance the Fed will lower its benchmark lending rate by 25 basis points on Sept. 18, with the remaining probability in favor of a more aggressive 50-basis-point reduction, according to the CME FedWatch tool.