The number of Americans filing for unemployment benefits last week reached the highest level in a year, which analysts say is likely hurricane helen – and this boeing machinists strike -Compared to broader softness in the labor market.
The Labor Department reported Thursday that applications for jobless claims rose by 33,000 to 258,000 in the week of Oct. 3. This is the most since August 5, 2023 and far exceeds analysts’ expectations of 229,000.
Analysts highlighted a big surge in jobless benefit applications last week in the states that were hardest hit. hurricane helenWhich includes Florida, North Carolina, South Carolina and Tennessee.
“Claims will continue to rise in states affected by Helen and hurricane milton “And until this is resolved, a Boeing strike will also be considered,” said Nancy Vanden Houten, chief US economist at Oxford Economics. “However, we think the Fed will view these effects as temporary and still expect to reduce rates (by 25 basis points) at the November meeting.”
Vanden Houten said Washington state was most affected by the Boeing strike and had a disproportionate share of the increase.
Applications for jobless benefits are widely considered representative of layoffs in a given week, although they can be volatile and prone to revisions.
The four-week average of claims, which evens out some of that weekly volatility, rose by 6,750 to 231,000.
The total number of Americans receiving jobless benefits rose by 42,000 in the week of Sept. 28 to nearly 1.86 million, the most since late July.
In addition to the weather and labor conflicts, some recent labor market data have suggested that higher interest rates could eventually weigh heavily on the labor market.
In response to weak employment data and falling consumer prices, the Federal Reserve last month Cut your benchmark interest rate By half a percentage point as the central bank shifted its focus from controlling inflation to supporting the job market.
The Fed’s goal is to achieve a rare “soft landing,” allowing it to reduce inflation without causing a recession.
It was the Fed’s first rate cut in four years after pushing the federal funds rate to a two-decade high of 5.3% following a series of rate hikes in 2022 and 2023.
Inflation continues to decline, approaching the Fed’s 2% target, and Chairman Jerome Powell recently announced that it is largely under control.
The government said this in a separate report on Thursday US inflation reaches its lowest point From February 2021.
Through the first four months of 2024, applications for unemployment benefits averaged just 213,000 a week before rising in May.
Their number reached 250,000 in late July, supporting the notion that higher interest rates are finally cooling the hot US job market.
In August, the Labor Department reported that the US economy 818,000 fewer jobs added From April 2023 to March this year, compared to originally reported.
The revised total was also seen as evidence that the job market was continuing to slow, forcing the Fed to start cutting interest rates.
Despite some signs of a slowdown in the labor market, US employers added a A surprisingly strong 254,000 jobs. In September, that eased some concerns about a weak job market and suggested the pace of hiring is still solid enough to support a growing economy.
Last month’s gain was more than economists expected, and it was significantly more than the 159,000 jobs added in August.
After rising for most of 2024, the unemployment rate fell for the second consecutive month to 4.1% in September from 4.2% in August.
