Weather, Boeing Strike Push Unemployment Claims to Highest Number in a Year

More Americans are filing for unemployment benefits than at any time in the last year.

But analysts don’t necessarily think it has as much to do with a softening of the labor market.

Analysts are saying the increase is more likely a result of Hurricane Helene — and the Boeing machinist strike — a reflection of the labor market, according to a report from The Associated Press.

Applications for jobless claims jumped to 258,000 for the week of Oct. 3, according to statistics released by the Labor Department. That’s an increase of 33,000 and represents the highest total since Aug. 5, 2023. It’s also well above the 229,000 analysts were expecting.

There big jumps in jobless benefit applications last week across states that were most affected by Hurricane Helene, including Florida, North Carolina, South Carolina and Tennessee.

“Claims will likely continue to be elevated in states affected by Helene and Hurricane Milton as well as the Boeing strike until it is resolved,” Nancy Vanden Houten, lead U.S. economist of Oxford Economics, told the AP. “We think, though, that the Fed will view these impacts as temporary and still expect it to lower rates by (25 basis points) at the November meeting.”

Venden Houten said that Washington state was the most impacted by the Boeing strike and accounted for a disproportionate share of the increase.

The four-week average of claims, which evens out some of that weekly volatility, rose by 6,750 to 231,000.

The total number of Americans collecting jobless benefits rose by 42,000 to about 1.86 million for the week of Sept. 28, the most since late July.

In response to weakening employment data and receding consumer prices, the Federal Reserve last month cut its benchmark interest rate by a half of a percentage point as the central bank shifts its focus from taming inflation toward supporting the job market.

It was the Fed’s first rate cut in four years after a series of rate hikes in 2022 and 2023 pushed the federal funds rate to a two-decade high of 5.3%. Inflation has retreated steadily, approaching the Fed’s 2% target and leading Chair Jerome Powell to declare recently that it was largely under control.