U.S. jobless claims fall; hurricanes still affecting data
Reuters
Published Sep 21, 2017 16:23
U.S. jobless claims fall; hurricanes still affecting data
By Lucia Mutikani
WASHINGTON (Reuters) - 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 Sept. 16, the Labor Department said. A Labor 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 percent of U.S. 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 U.S. 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.
FURTHER INCREASES POSSIBLE
"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 (NYSE:JPM) 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.
U.S. stocks were trading lower as investors continued to assess the Fed's policy statement. Prices for longer-dated U.S. government bonds rose while the dollar (DXY) slipped against a basket of currencies.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, rose 6,000 to 268,750 last week, the highest level since June 2016.
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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 percent of the firms indicated increases in activity this month while 15 percent 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 percent expecting to raise capital spending. About 55 percent of companies said they expected to increase production in the fourth quarter. The firms planned to boost output by either increasing hiring or the hours of current workers.
Written By: Reuters
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