US filings for jobless applications retreat back to recent ranges after big jump due to hurricanes

[October 18, 2024]  By MATT OTT

The number of Americans filing for unemployment benefits last week came back down to more recent ranges after a big jump the week before due to hurricanes in the Southeast.

The Labor Department reported Thursday that applications for jobless claims fell by by 19,000 to 241,000 for the week of Oct. 12. That’s well below the 262,000 analysts were expecting.

Applications for jobless benefits are widely considered representative of U.S. layoffs in a given week.

The four-week average of claims, which evens out some of the weekly volatility, rose by 4,750 to 236,250.

The total number of Americans collecting jobless benefits rose by 9,000 to about 1.87 million for the week of Oct. 5, the most since late July.

Last week, filings rose to their highest level since June of 2023, which economists said was likely a result of Hurricane Helene and an ongoing Boeing machinist strike.

Outside of the weather and labor strife, some recent labor market data has suggested that high interest rates may finally be taking a toll on the labor market.

In response to weakening employment data and receding consumer prices, the Federal Reserve last month cut its benchmark interest rate by a half of a percentage point as the central bank shifted its focus from taming inflation toward supporting the job market. The Fed is trying to pull off a rare “soft landing,” whereby it brings down inflation without tipping the economy into a recession.

A hiring sign is seen in Waukegan, Ill., on Sept. 28, 2024. (AP Photo/Nam Y. Huh, File)

It was the Fed’s first rate cut in four years after a series of increases starting in 2022 that pushed the federal funds rate to a two-decade high of 5.3%.

Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.

Last week, the government reported that U.S. inflation reached its lowest point since February 2021.

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 Labor 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 some signs of labor 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.

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