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Key Takeaways
- Only 227,000 people filed for unemployment last week, a decrease from the week before and far below forecaster expectations.
- Economists had thought Hurricane Milton and a strike at Boeing would cause a surge of jobless claims, but that has yet to materialize.
- Job market data has been scrutinized closely in recent months as Federal Reserve officials have grown more confident that inflation is falling and more concerned about the possibility of a severe rise in unemployment.
Forecasters braced for a storm of unemployment claims in the aftermath of Hurricane Milton; instead, the job market got sunnier.
U.S. workers filed 227,000 new claims for unemployment the week ending Oct. 19, down from 242,000 the week before, the Department of Labor said Thursday. Forecasters had expected claims to rise to 245,000, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Some experts had predicted far sharper jumps because people were forced out of work by Milton and its effects as well as an ongoing strike at Boeing.
The better-than-expected report comes at a time when data on the labor market is getting more attention than usual from financial markets and policymakers. Officials at the Federal Reserve are watching the job market for signs of weakness as they calibrate how quickly to lower the fed funds rate in the coming months, unwinding the central bank’s campaign of anti-inflation interest rate hikes as price increases cool.
Spiking unemployment could encourage the Fed to cut rates faster, pushing down borrowing costs on many kinds of loans. A healthier job market could mean central bankers could lower rates more slowly.
The impact of hurricanes Helene and Milton are making it harder for the Fed and other experts to gauge the true health of the job market. Helene caused a surge of jobless claims, but before that, a more comprehensive monthly report on the labor market showed it staying resilient as employers hired more people than expected.