US labour market shows resilience despite surge in jobless claims from Hurricane Helene

The Labour Department reported on Thursday that applications for jobless claims surged by 33,000 to 258,000 for the week of October 3, reaching their highest level in a year.

According to analysts, the increase in jobless claims is more likely attributed to the impact of Hurricane Helene rather than a widespread slowdown in the labour market. The figure exceeded expectations, surpassing the anticipated 229,000 and marking the highest number since August 5, 2023.

The consumer price index increased 0.2% last month after gaining 0.2% in August, the Labor Department’s Bureau of Labor Statistics said. Food prices jumped 0.4% after rising 0.1% in August. Grocery store food prices increased 0.4%, lifted by higher costs for meat, poultry, fish and eggs.

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Fruits and vegetable prices rebounded 0.9% after dropping 0.2% in August. But consumers got some relief from gasoline prices, which plunged 4.1%. Rents increased 0.3% after climbing 0.4% in the prior month. In the 12 months through September, the CPI rose 2.4%. That was the smallest year-on-year increase since February 2021 and followed a 2.5% advance in August.

Applications for jobless benefits are widely considered representative of U.S. layoffs in a given week, however, they can be volatile and prone to revision.

The four-week average of claims, which evens out some of that weekly volatility, rose by 6,750 to 231,000.

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The total number of Americans collecting jobless benefits rose by 42,000 to about 1.86 million for the week of Sept. 28, the most since late July.

Some recent labor market data has suggested that high interest rates may finally be taking a toll on the labor market.

During the first four months of 2024, applications for jobless benefits averaged just 213,000 a week before rising in May. They hit 250,000 in late July, supporting the notion that high interest rates were finally cooling a red-hot U.S. job market.

In August, the Labour Department reported that the U.S. economy added 818,000 fewer jobs from April 2023 through March this year than were originally reported. The revised total was also considered evidence that the job market has been slowing steadily, compelling the Fed to start cutting interest rates.

Despite of all the signs of labour market slowing, America’s employers added a surprisingly strong 254,000 jobs in September, easing some concerns about a weakening job market and suggesting that the pace of hiring is still solid enough to support a growing economy.

Last month’s gain was far more than economists had expected, and it was up sharply from the 159,000 jobs that were added in August. After rising for most of 2024, the unemployment rate dropped for a second straight month, from 4.2% in August to 4.1% in September.

With inputs from agencies.