Despite the recent hurricanes which took a heavy toll on the US economy, unemployment claims fell to their lowest level in 43 years. Obviously, historic-low jobless claims are clearly a good sign, indicating that layoffs are pretty rare occurrences and also that job creation is strong. As per the Department of Labor stats revealed on Thursday, there were 1.89 million laid-off Americans at the end of September receiving unemployment benefits.
Such a low number of laid off workers benefiting from unemployment has never been seen in 43 years, and that’s probably due to the job market bouncing back from the damage inflicted by hurricanes at a faster pace than previously predicted by analysts. Most states will provide unemployment benefits for laid off workers for up to 26 weeks and now, fewer Americans are receiving them than at any time since 1973. Yet, in 1973, the US workforce was significantly smaller than it is today, and that’s a great sign for the US economy, reflecting the availability of new positions for unemployed workers and a sign of robust job creation, following the landfall of hurricanes Maria, Irma and Harvey.
The states most affected by natural disasters were obviously seeing a rise in first time claims, yet for the past few weeks, unemployment claims appeared to be dropping again. According to the US chief economist for High Frequency Economics Jim O’Sullivan, let me quote:
The data suggest that payrolls will bounce back quickly after last month’s hurricane-related weakness and that the underlying trend in employment growth remains strong — more than strong enough to keep the unemployment rate declining.
According to market analysts, as the new claims are below the 300,000 threshold, this is a clear sign of unemployment figures remaining stable of even fall in the near future. However, the FED seems to regard the US economy to be healthy enough to justify another rate hike this year, and that would have catastrophic consequences for the stock market and the US economy.