Weekly news out of the employment sector was encouraging, as jobless claims dropped more than expected. The number of U.S. workers filing for new unemployment claims declined 9,000 to 311,000 on a seasonally-adjusted basis; economists were expecting the number of claims to rise by 1,000. This marked the lowest level of weekly initial jobless claims since July 28.

Claims for the September 8 week were nudged higher to 320,000 from 319,000. The 4-week average, which smoothes out week-to-week trends, dropped by 3,500 last week to 320,750. Continuing claims for those still drawing unemployment benefits fell 53,000 in the September 8 week to 2.544 million. The 4-week average for continuing claims was down 5,500 to 2.544 million. Across the country, 19 states reported an increase in initial jobless claims, while 34 reported a decrease, led by California.

This unexpected decline could bring a sigh of relief to the labor markets, as it might suggest that the decline in August nonfarm payrolls was an anomaly. On the flip side (and there's always a flip side), a sanguine employment market could reduce the chance for additional rate cuts. In early action, futures are pointing to negative open.