US Labour Market Plodding Along, but Jobs Becoming More Scarce

• New applications for U.S. unemployment aid unexpectedly fell last week. Still, the number of people collecting benefits in mid-October was the highest in nearly three years, indicating it was becoming harder for those losing jobs to land new positions.
• The second straight weekly drop in filings for state unemployment benefits reported by the Labor Department on Thursday likely reflected an ebb in claims from Hurricane Helene, which earlier this month had boosted applications to the highest level in nearly 1-1/2 years. The rise in claims related to Hurricane Milton has been more muted than initially feared.
• Given the distortions from the hurricanes and an ongoing strike by roughly 33,000 workers at Boeing, economists expected Federal Reserve officials to shrug off any sharp slowdown in nonfarm payrolls growth or rise in the unemployment rate when they meet next month. Though the hurricanes and the strike have obscured the labour market view, there does not appear to be a material shift.
• The Fed's "Beige Book" report on Wednesday described employment as having "increased slightly" in early October, "with more than half of the districts reporting slight or modest growth and the remaining districts reporting little or no change." It also noted that "many districts reported low worker turnover, and layoffs reportedly remained limited," adding that "demand for workers eased somewhat, with hiring focused primarily on replacement rather than growth."
• That was reinforced by a survey from S&P Global on Thursday showing a measure of employment in the manufacturing and services sectors holding steady in October. S&P Global said a decline in service jobs was "often linked to the non-replacement of leavers rather than layoffs."
• Historically low layoffs are propping up the labour market and the overall economy even as hiring has tapered off. Economists estimate that the hurricanes could cut as many as 40,000 jobs from October's nonfarm payrolls count. Estimates for payroll gains are currently in the 100,000 to 125,000 range.

(Source: Reuters)