Weekly Jobless Claims Inch Higher as Economy Braces for Hurricane Helene, Port Strike Fallout

File photograph shows an employment application form at Columbia-Greene Community College in Hudson, New York, on April 22, 2014. AP Photo/Mike Groll, File

The number of Americans filing unemployment benefits last week increased slightly, topping market expectations, according to recent federal government statistics.

New Department of Labor data show that initial jobless claims climbed by 6,000 from the previous week to a three-week high of 225,000 for the week ending September 28.

Markets had penciled in a reading of 220,000, and initial jobless claims remain above levels registered earlier in the year.

Continuing jobless claims—a gauge for the number of unemployed individuals who qualify for unemployment insurance benefits—were little changed at 1.826 million for the week ending September 21.

The four-week jobless claims average, which strips week-to-week volatility, was also relatively flat at 224,250 for the period ending September 28.

This comes after it was outplacement firm Challenger, Gray & Christmas reported September layoffs were down 4 percent from the previous month, though they were up 53 percent from the same time a year ago. Hiring plans were also subdued.

“Rising job cut announcements coupled with fewer hiring plans indicate businesses are hesitant about adding to their payrolls,” LPL Financial’s chief economist Jeffrey Roach said in an emailed statement to The Epoch Times.

Upcoming employment data might have some caveats. Hurricane Helene could trigger a spike in unemployment filings in the coming weeks. Additionally, the port strike could affect the October jobs report as port-related companies may begin laying off workers the longer the labor action lasts.

“Hurricane Helene and strikes by Boeing workers and dock workers will likely cause fluctuations in monthly economic data like the ISM surveys in October. These economic disruptions will likely be short-lived, but they will make the economy harder to read near-term,” Comerica Bank’s chief economist Bill Adams said in an emailed statement.

Recent government data highlight an economic climate of lackluster hiring and low firing. Economists think the Federal Reserve launching its easing cycle, which kicked off last month with a half-point interest rate cut, will stimulate labor demand and bolster economic prospects.

Slowing inflation levels has allowed the U.S. central bank to shift its focus to the maximum employment side of its dual mandate.

While monetary policymakers and economic observers generally agree that a significant crash in the labor market is unlikely, many are monitoring the figures.

In a recent essay, Minneapolis Fed President Neel Kashkari wrote that the economy is sending “mixed signals about its underlying strength.”

“While a softening labor market suggests a weakening of economic activity, other economic measures suggest ongoing strength,” Kashkari said. “Historically, the labor market has been a better real-time indicator of the health of the economy than measures of economic activity, which are reported with a lag and can be subject to material revisions.”

Consumers are also becoming more concerned about the jobs arena. This trend was highlighted in The Conference Board’s latest Consumer Confidence Index, with respondents more concerned about job security and incomes.

James Knightley, the chief international economist at ING, says ongoing employment weakness could supercharge calls for the Fed to cut rates by another 50 basis points at the November meeting.

“In an environment where inflation is looking much better behaved, the market pressure for ongoing substantial Fed interest rate cuts will persist,” Knightley said in a note. “If we get the unemployment rate rising back to 4.3% next Friday and a sub 75,000 payrolls print expect the calls for a second 50bp rate cut to grow markedly.”

The September jobs report is projected to show 140,000 new jobs and an unemployment rate of 4.2 percent.

Unemployment Rates Rising Across the Country

The Bureau of Labor Statistics published the newest figures from its Metropolitan Area Employment and Unemployment Summary. It revealed that unemployment rates were higher in August than a year ago in 315 of the 389 metropolitan areas.

Fifty-four areas registered lower jobless rates. They were unchanged in 20 places.

In addition, 238 metro areas had unemployment rates below the national average, and 139 areas had rates above it. Twelve locations had rates equal to the national number.

Sioux Falls, South Dakota, posted the lowest unemployment rate of 1.9 percent, while El Centro, California, recorded the highest rate of 20.2 percent.

Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, on Sept. 18, 2024. Anna Moneymaker/Getty Images

At a National Association for Business Economics event this week, Fed Chair Jerome Powell stated that monetary policymakers concentrate on the national aggregate levels. He reiterated his endorsement of the Beige Book, a monthly summary of regional economic conditions across the Fed’s 12 districts.

“I think the banks just do a great job of gathering data and information useful to us who are sitting in the center and don’t have that range of context,” Powell said.

At the July post-meeting press conference, Powell touted the value of the Beige Book and told reporters that he takes anecdotal data seriously.

The September Beige Book report found that economic activity was stagnating or contracting in most regions of the country. It also revealed that the overall labor market was solid as layoffs “remained rare.”

“Employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook,” the report reads.