In the aftermath of Hurricane Harvey, initial jobless claims were higher than they have been since 2015.
But while the influence of Hurricanes Harvey and Irma (which struck the Florida coast about two weeks later) continues to be felt by those at or near ground zero, the economic impact appears to have been mostly short-lived. The Labor Department reported Thursday that weekly jobless claims for the week ending Oct. 7, which economists had expected to remain steady at 258,000, actually fell to 243,000 barely a month after Harvey made landfall in Southeast Texas.
That marks a return to pre-hurricane levels.
The four-week moving average was 257,500, a drop of 9,500 from last week's figure.
“Employers remain reluctant to dismiss people amid a shortage of qualified workers, which has kept claims hovering near the lowest level in more than four decades,” wrote Bloomberg.
“Claims have been in the 250,000 range most of the year but spiked temporarily to nearly 300,000 due to job dislocations created by the hurricanes,” observed Amey Stone for Barron’s. “Now rebuilding efforts may be adding more jobs.”
“The job market is very quickly returning to pre-hurricane levels,” said Alexander Kuptsikevich, analyst for London-based FxPro. “Even more surprising was the decline in continuing jobless claims, which fell by 32,000 to 1.889 million, the lowest it’s been since 1973.”
Initial jobless claims are defined as first-time applications for jobless benefits. Continuing jobless claims refers to persons who have been receiving benefits and continue to qualify for them.
Jeffrey Bartash of MarketWatch noted, though, that “jobless claims are still unusually low in Puerto Rico after Hurricane Maria (which made landfall in Puerto Rico on Sept. 20). The lack of electricity has prevented people from filing claims and the island from processing them. These claims could surge in the next few weeks.”
“The faster-than-expected drop in jobless claims is an early indicator that the economy is still in good health despite the battering of coastal cities by recent hurricanes,” said John Engle, president of Illinois-based Almington Capital. “It is a good first sign that stabilization and rebuilding in damaged areas is underway. Currently, the rebuilding efforts appear to be well managed. There is always a risk that attention may drift away from these areas as they fall out of the news cycle; if appetite for action also wanes, then we might see some prolonged drag. But for now, at least, things are going about as well as anyone could reasonably hope.”
Amit Singh, president of LF Staffing Services Inc. and chief operating officer of Labor Finders International Inc., focused on temporary industrial employment.
“Leading up to and during the hurricane, temporary employment takes a significant hit,” Singh said. “We tend to see a sharp decline in temporary employment, in some cases as high as 60% down. However, it is shortly followed by a surge in demand as high as 50%, which tends to last longer. The greater the impact to the given area, the higher and longer will be the demand and opportunities for industrial employment. As indicated in this morning’s jobless claims report, we too are seeing an increase in employment opportunities. Our experience has been that in areas such as Houston and Miami, employment opportunities due to the rebuilding efforts will remain strong for some time.”
