Weekly jobless claims—a gauge of the number of individuals who filed for unemployment insurance for the first time—slowed last week as the economic fallout from Hurricanes Helene and Milton appear to be limited.
Markets had penciled in a reading of 260,000.
Last week’s claims were revised slightly higher to 260,000 from 258,000.
Claims in Florida and North Carolina fell by 3,428 and 2,404, respectively.
Other storm-affected states posted decreases in the recent report, including Kentucky (negative 1,470) and Tennessee (negative 91).
The federal government noted that layoffs in the manufacturing industry have resulted in states such as Michigan, Missouri, and Ohio reporting substantial jobless claims.
Continuing jobless claims—a measurement for the number of individuals regularly receiving weekly unemployment benefits—climbed to a slightly smaller-than-expected 1.867 million for the week ending Oct. 5.
This was up from the previous week’s downward adjustment of 1.858 million.
The four-week average, which strips the week-to-week volatility, increased to 236,250, up from 231,500 in the previous week.
Financial markets reacted favorably to the drop in jobless claims and the better-than-expected retail sales data, painting portraits of a stable labor market and a resilient economy.
Retail sales rose by 0.4 percent in September, up from 0.1 percent in August. Economists anticipated a 0.3 percent reading.
Before the opening bell, the leading benchmark indexes were in positive territory, with the Nasdaq Composite Index up by as much as 1 percent.
U.S. Treasury yields were also up across the board. The benchmark 10-year yield firmed above 4.07 percent. The two-year yield flirted with 4 percent, while the 30-year bond hit 4.35 percent.
These numbers “continue to defy the weak economy thesis,” Quincy Krosby, the chief global strategist for LPL Financial, said in a note.
“The implications for monetary policy center on whether the Fed worries that the renewed strength in the economy fuels an uptick in inflation, although expectations remain that there will be a 25 basis point cut at the next meeting, particularly if the hurricane damage severely impacts the labor market.”
September data showed that the headline annual inflation rate was higher than expected at 2.4 percent. Core inflation, which omits the volatile energy and food categories, rose to 3.3 percent.
Likewise, inflation in the PPI—a metric of prices paid for goods and services by businesses—clocked in at 1.8 percent last month, topping market forecasts. Inflation on core producer prices unexpectedly jumped to 2.8 percent.
Looking ahead to next month’s figures, the Cleveland Fed’s Nowcasting model indicates that the annual inflation rate will rise to 2.6 percent, and the core rate will remain unchanged at 3.3 percent.
As for the broader economy, projections suggest another solid third-quarter expansion.
Goldman Sachs economists have reduced their 12-month-ahead recession probability to 15 percent amid a “still-solid job market” and “broader growth data.”
However, while Wall Street is optimistic about the wider economic landscape, many Americans are still widely pessimistic.
Additionally, inflation remains the top issue heading into the November election for 41 percent of individuals.
“Let’s take stock of some facts regarding where the economy stands. We’ve seen new highs for the stock market’s major averages, falling inflation, the Federal Reserve shifting into easing mode, and a job market close to the level associated with full employment,” said Mark Hamrick, the senior economic analyst at Bankrate.
“Even so, voters’ perceptions about where we stand are far apart, and some of that has little to do with the broader economy, but their personal finances may vary widely.”
The Current and Future Economic Conditions Indexes also sank below economists’ projections.
Additionally, the one-year inflation outlook rose to 2.9 percent, while five-year inflation expectations dropped to 3 percent.
