US weekly jobless claims fall as hurricane distortions fade
THE number of Americans filing new applications for unemployment benefits fell to a five-month low last week and consumer spending increased more than expected in September, showcasing the economy’s strength heading into the final stretch of 2024 and just days before Nov 5 presidential election.
Though prices pushed higher last month, inflation is firmly on a downward trend, with other data on Thursday (Oct 31) showing labour costs posting their smallest gain in more than three years in the third quarter. The data likely keeps the Federal Reserve on track to cut interest rates next week and again in December.
“We are not concerned that inflation’s progress towards the Fed’s target is stalling, let alone reaccelerating,” said Ryan Sweet, chief economist at Oxford Economics.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 216,000 for the week ended Oct 26, the lowest level since May, the Labor Department said.
The third straight weekly decline likely reflected the fading distortions from Hurricanes Helene and Milton, which boosted claims in early October and kept them elevated through the middle of the month. Applications were also lifted by a strike at Boeing, which has forced the planemaker to implement rolling furloughs, and hurt its suppliers.
Economists polled by Reuters had forecast 230,000 claims for the latest week. Unadjusted claims fell 3,349 to 200,132 last week, with filings declining 2,969 in North Carolina and dropping 2,692 in Florida. Applications also fell in California, helping to more than offset a 2,061 jump in claims in New York and a 1,854 increase in Michigan.
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The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased 26,000 to a seasonally adjusted 1.862 million during the week ending Oct 19, the claims report showed.
Through the hurricanes and strike volatility, the labour market picture has probably not changed much. A report from global outplacement firm Challenger, Gray & Christmas on Thursday showed planned layoffs by US-based employers dropped 23.7 per cent to 55,597 in October.
The storms and labour strife, however, likely restrained job growth in October. The Labor Department reported last week that there were 41,400 workers on strike during the period that employers were surveyed for October’s employment report, including at Boeing and three hotel chains.
Economists estimate that the drag on payrolls from Helene and Milton could be as much as 70,000. A Reuters survey showed nonfarm payrolls probably increased by 113,000 jobs this month after rising by 254,000 in September. The unemployment rate is forecast unchanged at 4.1 per cent. The Labor Department is scheduled to publish October’s employment report on Friday, the last major economic data before the election next week.
Labour market resilience is combining with easing inflation, a rise in household net worth, thanks to a stock market boom and higher house prices, to support spending and the overall economy. REUTERS
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