New applications for unemployment benefits dropped by 23,000 to 259,000 in the second full week of the month, the Department of Labor reported Thursday, keeping intact a two-and-a-half year streak of claims below the 300,000 mark.
The plunge was unexpected good news, as forecasters had expected new claims to edge above 300,000 thanks to the massive disruptions caused by Hurricanes Harvey and Irma, which have pushed up claims in the past two weeks.
The last time that claims hit the 300,000 mark was at the end of February 2015.
Economists generally calculate that claims below 300,000 indicate steady or falling unemployment. In recent months, claims had been running at the lowest leves in decades, even as unemployment feel to below 4.5 percent.
And the surge in claims driven by the storms won’t translate to high unemployment, economists think. “[P]ast experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term,” Federal Reserve officials said in a monetary policy statement released Wednesday.
Thursday’s release suggest that the economies of Texas, Florida, Puerto Rico, and other places battered by hurricanes might prove even more resilient than expected.
In Texas, new weekly claims dropped fell by nearly half, from 52,000 to 28,000. In Florida, affected by Irma, claims jumped from 4,800 to 9,900. Puerto Rico saw claims grow nearly tenfold.
Once again, the claims numbers, which economists value because they come out every week, provided encouraging news about continued job growth. They will likely reassure the Fed that the economy is strong enough to demand further rate hikes in the months ahead, and give more time to President Trump and congressional Republicans to try to enact their economic agenda in favorable economic conditions.
