The number of people in the U.S. applying for unemployment benefits spiked to the highest point in over two years last week amidst an increase in applications in Texas, particularly in areas ravaged by Hurricane Harvey. However, the underlying trend has remained consistent with a strengthening jobs market.
Initial benefit claims for unemployment benefits from state soared by over 62,000 to an adjusted rate of 298,000 for the week ended September 2, which is its highest number since April of 2015, said the Labor Department on Thursday.
The increase for the week was the most since November of 2012. Data from the prior week was not changed. An official with the Labor Department said data from last week was impacted by devastating Hurricane Harvey, which hit many parts of Texas leaving mass destruction and flooding in its wake.
Unadjusted claims in Texas soared over 51,630 last week as people became temporarily unemployed. Claims in Louisiana were up by 258.
In addition, California, Kansas, Hawaii, Virginia, Wyoming and Puerto Rica claims were estimated due to the Labor Day holiday this week.
The moving average of four weeks of claims is considered a much better measure for trends in the labor market as it is able to eliminate the volatility of week to week. That figure increased 13,500 to just over 250,250 suggesting that the labor market remained strong.
The U.S. government reported a week ago that the economy has created over 156,000 new jobs during August, with private services hiring the least number of employees in the last five months.
The slowdown for job growth was largely dismissed by economists who blamed it on seasonal quirks. During the last several years, the start of August job reports’ have tended to show a weakness, with revisions showing strength.
The report released today showed that those still receiving benefits following their initial week fell by 5,000 to more than 1.94 billion. This continuing claims figure has been less than 2 million for 21 consecutive weeks, pointing to shrinking slack in the labor market.
The moving average of four weeks for continuing claims was down 4,000 to just over 1.95 million and has been less than 2 million for 19 straight weeks.
With another powerful hurricane set to hit the U.S. mainland this weekend, an increase in unemployment numbers might be seen over the upcoming two to three weeks.