Weekly unemployment claims climbed to their highest level in more than a year as the economy began to feel the economic fallout of Hurricane Helene.
The reading topped the consensus estimate of 230,000.
The fallout of Hurricane Helene could have fueled some of the higher-than-expected claims, as sizable increases were observed in Florida (9,377) and North Carolina (11,475). Other storm-affected states also registered higher claims, including Kentucky (3,426), Tennessee (4,367), and Virginia (3,089).
Still, there were significant gains in California (43,072), Texas (14,765), New York (12,658), Pennsylvania (9,772), and Ohio (9,546).
Michigan recorded an increase of 1,187 claims because of “layoffs in the manufacturing and in management of companies and enterprises industries.”
Continuing jobless claims—a metric for the number of individuals still receiving weekly unemployment benefits—rose to 1.86 million for the week ending on Sept. 28. This was up from the previous week’s downwardly revised 1.82 million.
Markets had penciled in a print of 1.83 million continuing jobless claims.
The four-week moving average for initial claims, which strips week-to-week volatility, edged up to 231,000 from 224,250 in the prior week.
Labor market data could be impacted in the coming weeks by the economic fallout from hurricanes Helene and Milton.
“Typically, severe weather events have limited long-term impacts on GDP or employment,” Bill Adams, chief economist for Comerica Bank, said in a note emailed to The Epoch Times. “Employment, retail sales, and industrial production typically fall in areas hit by severe weather, then rebound quickly as rebuilding starts.”
The recent bouts of labor action could impact short-term employment data, including the October jobs report, which will be released shortly before the Nov. 5 presidential election.
Boeing announced the temporary furloughs of tens of thousands of employees. Last month, about 33,000 machinists walked off the job. Although striking workers are ineligible for jobless benefits, a ripple effect could travel through supply chains and other markets.
While thousands of dock and port workers walked off the job, it was only a three-day strike, helping the U.S. economy avert a disaster, although it remains to be seen if there was any significant harm to supply chains.
“Some participants highlighted the fact that the unemployment rate had risen notably, on net, since April 2023,” the meeting summary stated. “Some participants stressed that rather than using layoffs to lower their demand for labor, businesses had instead been taking steps such as posting fewer openings, reducing hours, or making use of attrition.”
The Fed staff outlook remained solid, but growth for the second half of 2024 was adjusted slightly lower, “largely in response to recent softer-than-expected labor market indicators.”
Right now, the labor market is “operating with a small margin of slack,” and wage growth is decelerating, Adams noted.
“Although wage growth accelerated in the September jobs report, cross checks of wage growth like the ADP wage insights tracker, the Atlanta Fed’s wage growth tracker, and anecdotal reports in the Fed’s Beige Book point to continued moderation of wage growth; there are better than average chances that September’s hot wage growth is revised lower,” he said.
