The number of U.S. workers filing for unemployment benefits for the first time jumped by 28,000 last week to 337,000, surprising analysts who had expected a more modest increase of 7,000. This surprising number, marking the biggest weekly increase since February 10, suggests that the continued weakness in the housing sector, compounded with fears of an impending economic slowdown, could have negative repercussions on the labor market.

Continuing claims for the week of October 6 jumped by 19,000 to 2.53 million. The insured unemployment rate hit 1.9% for the October 6 week, unchanged from the prior week. Across the country, 45 states and territories reported an increase in unadjusted jobless claims for the October 6 week; 8 reported a decrease. California posted the sharpest increase, with 6,317 workers losing their jobs. Louisiana saw the biggest drop in claims, of 468.

While this is bad news for job seekers, it could be good news for those hoping for another interest-rate cut. The smoothed-out 4-week moving average rose 6,000 to 316,500. Futures markets are showing fairly even odds that an additional 25-basis-point rate cut will be in the cards at the end of this month.