US jobless rate is going up as the country faces mounting employee concerns and a back-to-back natural disaster.
Increasing US jobless rates refer to the number of Americans applying for unemployment benefits.
Why US Jobless Rate Increased
According to Reuters, initial claims increased by 33,000, therefore, summing it up to 258,000. This was recorded last week and ended in October. This is higher than the 230,000 claims that economists predicted, which brings the percentage to 15%.
A notable increase in claims came from Florida, North Carolina, and Washington state, and was mainly due to the impact of Hurricane Helene. The hurricane caused widespread damage in the Southeast, with Hurricane Milton expected to continue affecting some states in the coming weeks. The US jobless rate is also anticipated to further increase after this.
The outlook for the labor market during this time is only short term, though it could be likely to be distorted by Milton, which is currently causing deadly tornadoes that are expected to destroy homes, and establishments, and knock out power grids.
Now, unemployment benefits do not cover employees who participated in a strike. VCPost shared that Boeing's thousands of employees are currently on unpaid temporary leave to preserve company finances as they currently perform a strike for a new labor contract. This likely had an impact on a now-high US jobless rate.
Possible Impact of Continued Increase in US Jobless Rate
Experts, as reported by Bloomberg, believe that any potential decline in payrolls or increase in unemployment will not deter the Federal Reserve from implementing a 25 basis points interest rate cut in November.
Recently. VCPost stated that the US central bank lowered its benchmark interest rate by 50 basis points to a range of 4.75% to 5.00%, mainly affected by risks in the labor market. However, cutting them further could lead to rising prices, especially with inflation still not going down in the country as the consumer price index remains high.
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