WASHINGTON: The number of Americans filing for unemployment benefits unexpectedly fell last week, but the near-term outlook for the labour market was muddied by the continuing impact of Hurricanes Harvey and Irma.
Other data on Thursday showed manufacturing activity in the mid-Atlantic region accelerated in September amid a surge in new orders. But hiring by factories slowed and employees worked fewer hours this month compared to August.
Initial claims for state unemployment benefits declined 23,000 to a seasonally adjusted 259,000 for the week ended on September 16, the Labour Department said. A Labour Department official said Harvey and Irma affected claims for Texas and Florida.
With Hurricane Maria lashing Puerto Rico this week, weather will likely continue to affect claims data and potentially hurt job growth in September. Texas and Florida account for about 14 per cent of US employment. “The noise will overwhelm any signal in these data for several weeks,” said John Ryding, Chief Economist at RDQ Economics in New York.
Federal Reserve Chair Janet Yellen told reporters on Wednesday that “payroll employment may be substantially affected in September” by the storms, but she added that she expected labour market conditions would “strengthen somewhat further.”
Yellen made the comments after the US central bank left interest rates unchanged but signalled it still anticipated one more rate increase by the end of the year.
Last week, unadjusted jobless claims for Texas fell 23,549, the second straight weekly drop, as the effects of Harvey faded. Claims in Texas surged in the wake of storm, which disrupted oil, natural gas and petrochemicals production, leaving some workers temporarily unemployed.
Unadjusted claims for Florida rose by only 5,133 last week. “It is possible we will see further increases in Florida claims in the coming weeks if the storm hindered people’s ability to file claims immediately,” said Jesse Edgerton, an economist at JPMorgan in New York.
Economists had forecast claims rising to 300,000 in the latest week. It was the 133rd straight week that claims remained below the 300,000 threshold, which is associated with a robust labour market. That is the longest such stretch since 1970, when the labour market was smaller. The claims data covered the survey period for the nonfarm payrolls portion of September’s employment report.
The four-week moving average of claims rose by 28,250 between the August and September survey periods, suggesting a further slowdown in job growth. The economy added 156,000 jobs in August, with the private services sector hiring the smallest number of workers in five months.
In a separate report on Thursday, the Philadelphia Fed said its manufacturing activity index for the mid-Atlantic region rose about 5 points to a reading of 23.8 in September. It said almost 39 per cent of the firms indicated increases in activity this month while 15 per cent reported a decrease.
The survey’s measure of new orders jumped to a reading of 29.5 this month from 20.4 in August. The employment index fell to 6.6 from 10.1 in August, but has now remained positive for 10 consecutive months. A measure of the average workweek dropped to a reading of 11.9 from 18.8 last month.
Firms were upbeat about the next six months, with nearly 44 per cent expecting to raise capital spending. — Reuters
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