The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, but may remain high in the near term due to the effects of Hurricanes Helene and Milton, which clouded the labor market picture.
Initial claims for state jobless benefits fell by 19,000 last week to a seasonally adjusted 241,000 for the week ended Oct. 12, according to a Labor Department report on Thursday.
Economists polled by Reuters had expected 260,000 claims for the latest week. Claims rose to their highest level in more than a year in the previous week, due to Helene, which devastated Florida and much of the US Southeast in late September.
The drop in claims due to Helene is likely to be offset by an expected surge in claims following Milton, which hit Florida a few weeks after Helene.
A month-long strike by about 33,000 technicians at Boeing, which has ripple effects across the planemaker's supply chain as well as its non-striking workers, also clouded the outlook for the labor market. Boeing has struggled with various problems before a strike by unionized workers on the West Coast, and last week announced 17,000 job cuts.
The claims report covers the week in which the government surveyed employers for the non-farm payrolls component of the October jobs report. Economists expect Federal Reserve officials will not put too much emphasis on the jobs report when they meet in early November. The report will be released a few days before the US presidential election on November 5.
Nonfarm payrolls rose the most in six months in September, with the jobless rate falling to 4.1% from 4.2% in August. The US central bank last month cut its benchmark interest rate by 50 basis points, the first major reduction since 2020, to a range of 4.75%-5.00%, highlighting growing risks to the labor market.
The Fed, which has raised policy rates by 525 basis points in 2022 and 2023 to tame inflation, is expected to cut rates by just 25 basis points next month.
The number of people receiving benefits after the first week of aid, a proxy for hiring, rose by 9,000 to a seasonally adjusted 1.867 million for the week ended Oct. 5, according to the claims report.
