US jobless claims soar to 2012 high on Hurricane Harvey | Fin24
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US jobless claims soar to 2012 high on Hurricane Harvey

Sep 07 2017 15:30
Shobhana Chandra, Bloomberg

Washington - US jobless claims surged last week by the most since November 2012 as tens of thousands of Texans displaced by Hurricane Harvey filed applications to collect benefits, according to Labour Department figures on Thursday.

Highlights of jobless claims (Week ended September 2)

• Initial jobless claims increased by 62k to seasonally adjusted 298k (est. 245k).

• Applications filed in Texas surged by an unadjusted 51 637 from the previous week to 63 742.

• Continuing claims in US fell by 5k to 1.94m in week ended August 26 (data reported with one-week lag).

Key takeaways

The jump in claims was the biggest since superstorm Sandy slammed into the Northeast and pushed the overall level of filings to the highest level since April 2015. The results are among the first to show that Harvey, which made landfall on August 25 along the Gulf Coast in Texas, will cause swings in broader economic data.

Employment may be depressed initially until rebuilding and recovery efforts in flooded areas around Houston take hold.

Prior to the storm, the claims figures had been consistent with an improving labor market picture. A shortage of qualified workers is making companies reluctant to dismiss employees, which has kept the underlying trend in applications for unemployment benefits near the lowest level in more than four decades.

Recent reports on manufacturing and services highlighted solid demand for labour, helping underpin consumer spending, the biggest part of the economy.

Other details

• Four-week average of initial claims, a less-volatile measure than the weekly figure, rose to 250 250 from 236 750.

• Unemployment rate among people eligible for benefits held at 1.4%, where it’s been since the week ended April 1.

• Claims were estimated for California, Hawaii, Kansas, Virginia and Wyoming last week.

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