US Jobless Claims Climb to 225K; Strikes and Hurricane Helene Impact Labor Outlook

US Jobless Claims Edge Up, But Strikes and Hurricane Helene Create Uncertainty

The number of Americans filing for unemployment benefits rose by 6,000 last week, reaching a seasonally adjusted 225,000 for the week ending September 28, according to the U.S. Labor Department. While this increase is slightly above economists’ forecast of 220,000 claims, it remains within levels that indicate a stable labor market, supported by low layoff rates.

Impact of Hurricane Helene on Labor Market

Hurricane Helene, which recently swept across the southeastern U.S., is expected to temporarily distort labor market data. The hurricane devastated infrastructure and homes in states such as North Carolina, South Carolina, Georgia, Florida, Tennessee, and Virginia. It also claimed the lives of at least 162 people. Recovery efforts, which Homeland Security Secretary Alejandro Mayorkas described as a “multibillion-dollar undertaking,” will take years to complete. In the short term, the disruption caused by the hurricane may affect the accuracy of labor data, as displaced workers may not be immediately counted in the jobless claims.

Strikes Add Further Uncertainty

Strikes by 30,000 Boeing machinists and 45,000 dockworkers on the U.S. East Coast and Gulf Coast are also adding complexity to the labor market. Although striking workers are ineligible for unemployment benefits, the ripple effects on supply chains and businesses dependent on Boeing and the ports could lead to temporary layoffs. Boeing has already announced temporary furloughs for tens of thousands of employees, including many U.S.-based managers and executives.

Continued Claims and Labor Market Outlook

Meanwhile, continuing claims—a measure of those receiving unemployment benefits after the initial week—slipped by 1,000 to a seasonally adjusted 1.826 million for the week ending September 21. This indicates that while initial claims are up, hiring remains steady in some sectors.

Disruptions Could Lead to Increases

While the underlying labor market remains stable, the short-term outlook is bearish due to the potential disruptions from Hurricane Helene and the Boeing and port strikes. These factors could lead to temporary increases in jobless claims and layoffs, potentially affecting market sentiment. Traders should closely monitor labor market data in the coming weeks for clearer signals.