WASHINGTON (Reuters) – The number of Americans filing new applications for unemployment fell last week as the distortions from hurricanes faded.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 216,000 for the week ended Oct. 26, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.
Claims surged early in the month as Hurricane Helene disrupted economic activity the Southeast and remained elevated through the middle of the month after Hurricane Milton lashed Florida. Filings have also been boosted by striking factory workers at Boeing, which has forced the planemaker to implement rolling furloughs.
The strike has negatively impacted Boeing’s suppliers.
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 labor market picture has probably not changed much.
A report from global outplacement firm Challenger, Gray & Christmas on Thursday showed planned layoffs by U.S.-based employers dropped 23.7% to 55,597 in October.
The storms and labor 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%.
The Labor Department is scheduled to publish October’s employment report on Friday. Economists expect Federal Reserve officials will likely brush aside the employment report when they meet next week and cut interest rates by 25 basis points.
The U.S. central bank last month rolled out its policy easing cycle with an unusually large half-percentage-point interest rate cut, the first reduction in borrowing costs since 2020. The Fed’s policy rate is now set in the 4.75%-5.00% range, having been hiked by 525 basis points in 2022 and 2023.
(Reporting by Lucia Mutikani; Editing by Dan Burns)
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