Initial jobless claims fall despite hurricane’s impact

The fall in initial jobless claims last week aligns with a strong labor market, despite the recent impact of Hurricane Milton. Total initial claims dropped to 227,000 from 242,000 for the week ending Oct. 18, the Labor Department reported on Thursday.

Florida’s new filings for claims spiked last week, rising from 6,300 to 10,600 in the aftermath of the hurricane. But declines in new claims from other states were sufficient to offset most of Florida’s spike.

We expect some residual volatility in the last two weeks of October before we get a clearer view of the underlying layoff trend through jobless claims numbers in November.

So far, businesses and workers have shown resilience in weathering the storms and may return to trend sooner than expected.

The impact of these weather events, combined with the Boeing strike, should be evident in the next payroll report, which will be released on Nov. 1. This disruption will most likely widen the range of forecasts for net job gains. We are looking at a range of 80,000 to 150,000 jobs added in the October payroll report.

As more labor market data becomes available next week, we should get a better sense of the final estimate. But even if the jobs number comes in below 100,000, one should not interpret it as a sign of overall weakness in labor conditions, given the significant distortions in recent weeks.

This article was written by Tuan Nguyen and originally appeared on 2024-10-24. Reprinted with permission from RSM US LLP.
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