Recent government data revealed a notable decline in weekly applications for unemployment insurance in the United States, while continuing claims have surged to their highest level since late July. According to the Department of Labor, the seasonally adjusted number of initial claims decreased by 19,000, reaching a total of 241,000 for the week ending on October 12.
This figure comes in lower than the consensus estimate of 258,000 predicted by analysts compiled by Bloomberg. Additionally, the previous week's claims were revised upwards by 2,000, resulting in a revised total of 260,000. The four-week moving average now stands at 236,250, which reflects an increase of 4,750 from the prior average that was also revised up by 500.
On a weekly basis, unadjusted claims dropped by 11,416, culminating in a total of 224,763. Economist Nancy Vanden Houten from Oxford Economics indicated that claims continue to be influenced by states recovering from recent hurricanes and the ongoing strike involving Boeing. “Looking past these factors, we believe the claims data indicates a labor market that has cooled yet is not collapsing, which allows the Federal Reserve to consider future rate cuts at a measured pace,” she noted in her remarks to MT Newswires. For the week ending October 5, the seasonally adjusted continuing claims reached a total of 1.87 million, marking the highest point since July 27 and aligning closely with Bloomberg's consensus.
Continuing claims witnessed an increase of 9,000 from the previous week’s level, which was revised downward by 3,000. The four-week moving average for continuous claims is recorded at 1.84 million, rising by 11,500 compared to the earlier downwardly revised average, as reported by the DOL. “Continued claims are expected to remain high as long as the Boeing strike persists and individuals impacted by the hurricanes return to their previous jobs or seek new employment,” added Vanden Houten. Hurricane Milton hit Florida last week, following the landfall of Hurricane Helene in late September.
In the context of labor disputes, Boeing recently withdrew its latest pay offer to striking workers after negotiations with the International Association of Machinists and Aerospace Workers took a turn for the worse. Regional data indicates that Michigan witnessed the most significant increase in initial claims for the week ending October 5, totaling 9,389.
This was closely followed by North Carolina at 8,714 and Ohio with 4,648 claims. Conversely, Wyoming reported the most substantial decrease, with claims declining by 24, alongside reductions in Idaho and Louisiana..