The number of Americans filing for unemployment benefits last week jumped to its highest level in a year, reaching 258,000, which is attributed to the impact of Hurricane Helene and the Boeing machinist strike.
Analysts believe the Federal Reserve will view these impacts as temporary and maintain plans for a November rate cut, considering the recent surge in jobless claims as an anomaly rather than a broader softening in the labor market.
The big picture: The rise in jobless benefit applications was particularly prominent in states most affected by Hurricane Helene and the Boeing strike, such as Florida, North Carolina, South Carolina, Tennessee and Washington.
- Despite the increase in jobless claims, September job gains were surprisingly strong at 254,000, alleviating concerns about market weakness and indicating solid hiring to support a growing economy.
Driving the news: The Federal Reserve had previously cut its benchmark interest rate in response to weakening employment data and receding consumer prices, with the goal of achieving a “soft landing” in the economy.
- Additionally, recent labor market data suggested that high interest rates may have finally started to take a toll on the job market, potentially contributing to the rise in jobless benefit applications.
