&w=1024&resize=1024,0&ssl=1 "US jobless claims jumped to 258,000, highest level in a year")
The number of Americans filing for unemployment benefits last week reached the highest level in a year, which analysts say is more likely than a broader labor market slowdown caused by Hurricane Helen and the Boeing machinist strike.
The Labor Department reported Thursday that jobless claims rose by 33,000 to 258,000 in the week ending Oct. 3. This was the highest value since August 5, 2023 and exceeded analyst expectations of 229,000.
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Analysts highlighted large increases in jobless claims last week in states hit hardest by Hurricane Helen, including Florida, North Carolina, South Carolina and Tennessee.
Claims will continue to be higher in states affected by Helen and Hurricane Milton, as well as the Boeing strike, said Nancy Vanden Houten, chief U.S. economist at Oxford Economics. We think, however, that the Fed will consider these effects as temporary and is still expected to cut rates (25 basis points) at the November meeting.
Vanden Houten said Washington state was hit hardest by the Boeing attack and was responsible for a disproportionate share of the increase.
Unemployment claims are considered representative of U.S. layoffs in a given week, but they can be volatile and subject to revision.
The four-week claims average, which smoothed out some of the weekly volatility, rose 6,750 to 231,000.
The total number of Americans receiving unemployment benefits increased by 42,000 in the week ending September 28 to nearly 1.86 million, the highest number since late July.
In addition to weather conditions and labor conflicts, some recent labor market data suggests that higher interest rates may finally have an impact on the labor market.
In response to weakening employment data and falling consumer prices, the Federal Reserve cut its benchmark interest rate by half a percentage point last month as the central bank shifted its focus away from controlling inflation. to support the labor market. The Fed's goal is to achieve a rare soft landing by reducing inflation without causing a recession.
It was the Fed's first rate cut in four years, after a series of rate hikes in 2022 and 2023 that pushed the federal funds rate to a two-decade high of 5.3%.
Inflation has retreated steadily, approaching the Fed's 2% target, and Chairman Jerome Powell recently announced that it was largely under control.
In a separate report released on Thursday, the government said US inflation reached its lowest level since February 2021.
In the first four months of 2024, unemployment benefit claims averaged just 213,000 per week, before a spike in May. They reached 250,000 in late July, supporting the idea that higher interest rates are finally cooling the red-hot U.S. labor market.
In August, the Labor Department said the U.S. economy added 818,000 fewer jobs between April 2023 and March of this year than initially reported. The revised totals were also seen as evidence that the labor market is steadily slowing, prompting the Fed to begin cutting interest rates.
Despite some signs of a slowing labor market, U.S. employers added a surprisingly strong 254,000 jobs in September, easing some concerns about a weak labor market and suggesting the pace of hiring is strong enough to support a growing economy. .
Last month's gain was bigger than economists expected and was up sharply from the 159,000 jobs created in August. After rising for most of 2024, the unemployment rate fell for the second consecutive month, to 4.1% in September, compared to 4.2% in August.
