The number of Americans filing for unemployment benefits fell last week, easing after a recent surge caused by hurricane-related disruptions in the Southeast.
The Labor Department reported Thursday that jobless claims dropped by 19,000 to 241,000 for the week ending October 12.
This marked a significant decrease from the previous week’s spike of 260,000, which was attributed to the effects of Hurricane Helene.
Applications for unemployment benefits, seen as a proxy for layoffs, are often used to gauge the strength of the labor market.
While the number of claims returned to a more typical range, the four-week average of claims—considered a better indicator of trends—rose slightly by 4,750 to 236,250.
The total number of Americans receiving unemployment aid rose by 9,000 to 1.87 million for the week of October 5.
This was the highest level since late July, signaling some lingering impacts on employment.
A hiring sign is posted on the door of a Taco Bell on August 22, 2024 in Alexandria, Virginia. The decrease in jobless claims followed a spike in claims caused by Hurricane Helene, which affected much of the Southeast.
Anna Rose Layden/Getty Images
A previous spike in claims was attributed to both Hurricane Helene, which tore through the Southeast, and a machinist strike at Boeing.
Though workers on strike do not qualify for unemployment benefits, the industrial action has affected other businesses dependent on Boeing’s supply chain, leading to temporary layoffs.
Federal Reserve policymakers are watching the labor market closely as they weigh the effects of their monetary policies aimed at slowing inflation.
Last month, the Fed reduced its key interest rate by half a percentage point, marking a shift towards supporting employment amid signs of a slowing economy.
The hurricane-related volatility in unemployment claims is likely to continue, with analysts predicting further distortions in the data.
Economist Bill Adams said that disruptions from a subsequent storm, Hurricane Milton, which hit Florida, could also skew upcoming jobless claims figures.
“Employment, retail sales, and industrial production typically fall in areas hit by severe weather, then rebound quickly as rebuilding starts,” he wrote in a recent note.
Though the hurricanes have contributed to short-term turbulence, longer-term data indicates that high interest rates have begun to affect the broader job market.
An aerial view of people walking past destroyed and damaged buildings in the aftermath of Hurricane Helene flooding on October 8, 2024 in Bat Cave, North Carolina. Analysts predict further short-term volatility in jobless claims as a result of recent storms Helene and Milton.
Mario Tama/Getty Images
Jobless claims had remained relatively low for much of the year, averaging 213,000 per week during the first four months of 2024, before rising in May.
Applications hit 250,000 in late July, reinforcing concerns that elevated borrowing costs were cooling the labor market.
In August, the Labor Department revised its earlier employment data, revealing that the U.S. added 818,000 fewer jobs between April 2023 and March 2024 than previously reported.
This downward revision further suggested a gradual slowdown in hiring.
However, despite these signs of weakening, employers added a surprisingly strong 254,000 jobs in September, indicating that the labor market remains resilient enough to support the broader economy.
The Fed’s current challenge is to engineer a “soft landing”—reducing inflation without triggering a recession.
Inflation has steadily declined, nearing the Fed’s 2 percent target, which prompted Chair Jerome Powell to say recently that the central bank was close to achieving its goal.
This article includes reporting from The Associated Press
