New jobless claims surged as Hurricane Helene tore through southwest

The number of Americans who applied for unemployment benefits surged by 33,000 to 258,000 in the week that ended October 5th, according to the Labor Department – the highest level of initial claims since early August 2023. Economists polled by the Wall Street Journal had estimated new claims would rise by just 5,000 to 230,000. The sharp rise has been attributed to manufacturing and management layoffs in Michigan and a strike at Boeing, as well as in states impacted by Hurricane Helene. The labor market’s short-term outlook is also likely to be distorted by Hurricane Milton, which made landfall in Florida on Thursday. The four-week moving average of new applications rose to 231,000, while continuing claims, reported with a one-week lag, rose to 1.86m. “Claims will likely continue to be elevated in states affected by Helene and Hurricane Milton as well as the Boeing strike until it is resolved,” said Nancy Vanden Houten, lead U.S. economist of Oxford Economics. “We think, though, that the Fed will view these impacts as temporary and still expect it to lower rates by (25 basis points) at the November meeting.”