Hurricanes are mucking up US economic data and there’s no end in sight
US initial jobless claims unexpectedly retreated to 241,000 for the week ending October 12 after jumping to 260,000 in their prior reading — their highest level in more than a year. That was due to the impact of Hurricane Helene in states like Florida, Georgia, Virginia, Tennessee, and the Carolinas, as well as a spike in layoffs in more industrially-oriented states.
This week’s drop in claims would have been even larger if not for the lingering effects of the storm.
“In the latest week, claims in Helene-hit areas only retreated by about 2k, but claims in industrial states slid by -14k, suggesting that most of the layoffs in those areas in the prior week were likely temporary,” wrote Omair Sharif, founder of Inflation Insights. “In any case, it is likely that we could see another jump in claims in next one or two reports, as the impact of Hurricane Milton begins to filter into the data.”
Weather-addled data will make it more difficult for monetary policymakers at the Federal Reserve to determine how the job market is doing, which has become top of mind thanks to the significant deceleration in inflation.
