U.S. jobless claims rose more than expected last week, for the highest level of claims since late August, after Florida was hit by Hurricane Ian.
The labor market has remained strong overall, and many firms are still hoarding workers even as the economy begins to slow, and many positions remain open.
The uptick of 9,000 first-time claims was a modest rise from the previous week’s unrevised level of 219,000.
Many economists were expecting jobless claims to rise to 225,000.
“While there have been some signs of a slight loosening in labor market conditions, the job market overall remains tight,” said Nancy Van den Houten, lead U.S. economist at Oxford Economics to Business Insider.
There were still 1.7 job openings for every unemployed person on the last day of August, due to the labor shortage.
“Even as the economy slows, employers appear to be reluctant to lay off workers that they have struggled to hire and retain,” said Van den Houten.
“We expect only a modest rise in unemployment and jobless claims as we head toward a mild recession in 2023.”
The more stable four-week moving average of jobless claims climbed up to 211,500 from the previous week’s unrevised average of 206,500.
The number of people receiving continuing claims nationwide rose slightly by 3,000 to 1.368 million.
Meanwhile, the unemployment rate again dropped to its pre-pandemic level from February 2020, which it previously matched in July.
Labor Market Remains Strong
Applications in Florida alone surged by 10,368, after the destruction in the wake of Hurricane Ian destroyed many businesses and homes and put thousands out of work, but natural disasters tend to lead to economic growth in the long term, as communities gradually start to rebuild.In addition to Florida, there were also big increases in jobless filings in New York, California, and Texas, while claims in Puerto Rico remained elevated in the aftermath of Hurricane Fiona.
There have various reports this week, that big firms like Intel are planning to lay off workers, due to a dip in the consumer markets.
The Labor Department’s closely watched monthly jobs report from Oct. 7, showed U.S. job growth slowing in the month of September.
However, payrolls again came in slightly stronger than economists had anticipated.
Non-farm payroll employment last month rose by 263,000 jobs after a 315,000 gain in August, well ahead of economists’ expectations.
This came after the upwardly revised 537,000 job figures in July.
The report also showed the unemployment rate falling to 3.5 percent in September, after the 3.7 percent results for August, which was in sync with most forecasts.
The Federal Reserve is likely to continue its stated policy to increase interest rates further, due to the strong jobs figures.
“Sticky-high services inflation is a reflection of the resilience of the labor market, since services are labor-intensive and produced domestically,” said Michael Gapen, chief U.S. economist at Bank of America Securities in New York to Reuters.
“The Fed needs to slow the labor market down significantly to bring inflation back to target.”
