FILE PHOTO: Signage for a job fair is seen on 5th Avenue in Manhattan, New York City, U.S. REUTERS/Andrew Kelly
WASHINGTON: The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting that job growth likely rebounded in November after abruptly slowing last month amid hurricanes and strikes.
Initial claims for state unemployment benefits dropped 6,000 to a seasonally adjusted 213,000 for the week ended Nov. 16, the Labor Department said on Thursday. Economists polled by Reuters had forecast 220,000 claims for the latest week.
The data included the Veterans Day holiday, which could have injected some volatility. Though claims surged in early October amid disruptions caused by Hurricanes Helene and Milton as well as strikes by factory workers at Boeing and another aerospace company, layoffs have remained low. That is softening the hit on the labor market from sluggish hiring.
The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of November's employment report.
Government data on Tuesday confirmed that Helene, Milton and the aerospace strikes had accounted for much of the sharp slowdown in job growth in October. The state employment and unemployment report also showed the labor market steadily slowing.
Economists estimated that the strikes and storms probably subtracted between 100,000 and 125,000 jobs from payrolls last month. Nonfarm payrolls increased by a scant 12,000 jobs in October, the smallest gain since December 2020, after rising by 223,000 in September.
The Boeing strike ended early this month after workers accepted a new contract, while rebuilding is underway in the areas devastated by the hurricanes. That creates a base of at least 100,000 jobs for November's payrolls.
Data next week on unemployment rolls could offer more clarity on the state of the labor market in November.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 36,000 to a seasonally adjusted 1.908 million during the week ending Nov. 9, the claims report showed. The so-called continuing claims have been boosted by Boeing-related furloughs and the hurricanes.
The employment report for November could determine if the Federal Reserve cuts interest rates again in December after data suggested that progress lowering inflation to its 2% target had stalled in recent months.
The U.S. central bank cut rates by 25 basis points earlier this month, lowering its benchmark overnight interest rate to the 4.50%-4.75% range. The Fed embarked on its policy easing cycle with an unusually large half-percentage-point rate cut in September, its first reduction in borrowing costs since 2020.
It hiked rates by 525 basis points in 2022 and 2023 to curb a surge in inflation. - Reuters
