U.S. Jobless Claims Fall to 44-Year Low After Hurricane Disruptions
The number of Americans filing applications for new unemployment benefits fell to the lowest level in 44 years, reflecting power outages in storm-ravaged Puerto Rico and the U.S. Virgin Islands that have disrupted the application process.
Initial jobless claims, a proxy for layoffs across the U.S., fell by 22,000 to a seasonally adjusted 222,000 in the week ended Oct. 14, the Labor Department said Thursday.
The sharp drop obscures underlying trends in the labor market. Many applying for unemployment benefits in Puerto Rico and the U.S. Virgin Islands, which were recently devastated by Hurricanes Irma and Maria, must submit paper applications because power outages and infrastructure damage are disrupting the electronic process. This has slowed what would likely be an influx of unemployment applications to a trickle, a Labor Department economist said.
Economists surveyed by The Wall Street Journal expected 239,000 new claims last week.
Despite the electronic disruptions in Puerto Rico and the U.S. Virgin Islands, jobless claims spiked in the last month because of Irma and Maria and another storm, Hurricane Harvey, affecting claims numbers in the two American territories and Florida, Georgia and Texas.
Jobless claims could edge up slightly in California in the next few weeks because of wildfires that have plagued the Northern part of the state, which has decimated homes and businesses.
Still, claims have remained historically low, showing the overall health of the labor market. Claims numbers have remained below 300,000 a week for more than two and a half years.
Jobless claims data can be volatile. The four-week moving average, a steadier measure, dropped 9,500 to 248,250 last week, after hitting a more than one-year peak in mid-September.
The number of claims workers made for longer than a week also dropped, falling to 1,888,000 in the week ended Oct. 7, which is reported along with last week's data because continuing claims are released with a one-week lag.
The unemployment rate dipped to 4.2% in September, the lowest reading in 16 years, despite U.S. nonfarm employers shedding jobs for the first time since September 2010. The hemorrhaged jobs are likely a reflection of hurricane-related economic disruptions, though Puerto Rico and the U.S. Virgin Islands aren't included in national employment data.
The Labor Department's latest report on jobless claims can be accessed at: https://www.dol.gov/ui/data.pdf
Write to Sharon Nunn at Sharon.Nunn@wsj.com and Josh Mitchell at Joshua.Mitchell@wsj.com
(END) Dow Jones Newswires
October 19, 2017 08:45 ET (12:45 GMT)