US Weekly Jobless Claims Unexpectedly Fall

• The number of Americans filing new applications for unemployment unexpectedly fell last week, but could remain elevated in the near-term amid the effects of Hurricanes Helene and Milton, obscuring the labour market picture.
• Initial claims for state unemployment benefits dropped 19,000 last week to a seasonally adjusted 241,000 for the week ended Oct. 12, the Labor Department said on Thursday.
• Economists polled by Reuters had forecast 260,000 claims for the latest week. Claims jumped to more than a one-year high in the prior week, attributed to Helene, which devastated Florida and large swathes of the U.S. Southeast in late September. The ebb in filings from Helene is likely to be offset by an anticipated deluge of claims due to Milton, which slammed into Florida weeks after Helene.
• A month-long strike by roughly 33,000 machinists at Boeing, which is having ripple effects on the planemaker's supply chain and its non-striking workforce, is also blurring the labour market view. Boeing had been struggling with a multitude of problems before the strike by its unionised West Coast workers and announced 17,000 job cuts last week.
• The claims report covered the week during which the government surveyed employers for the nonfarm payrolls component of October's employment report. Economists expect Federal Reserve officials won't place too much weight on the employment report when they meet in early November. The report will be released days before the Nov. 5 U.S. presidential election.
• Nonfarm payrolls increased by the most in six months in September, with the unemployment rate falling to 4.1% from 4.2% in August. The U.S. central bank last month cut its benchmark interest rate by an unusually large 50 basis points to the 4.75%-5.00% range, the first reduction in borrowing costs since 2020, highlighting rising risks to the labour market.

(Source: Reuters)