The number of Americans filing for unemployment benefits jumped to a more than two-year high last week amid a surge in applications in hurricane-ravaged Texas, but the underlying trend remained consistent with a strong labor market.
The surge in claims reported by the Labor Department on Thursday offered an early glimpse of Hurricane Harvey’s impact on the economy. The storm unleashed unprecedented flooding in Houston, disrupting oil, natural gas and petrochemical production and forcing a temporary closure of refineries.
As Texas tries to recover from the late August storm, Florida is bracing for Hurricane Irma, which is expected to make landfall over the weekend.
Economists say Harvey could put a dent in third-quarter gross domestic product and hold back job growth in September. But they expect any lost output to be recouped in the fourth quarter and payrolls growth to rebound in October.
“The near-term economic impact of what increasingly appears to be two severe natural disasters in close proximity to one another will be a clear negative,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. “Having said that, the national economy appears to remain on track.”
Initial claims for state unemployment benefits surged 62,000 to a seasonally adjusted 298,000 for the week ended Sept. 2, the highest level since April 2015, the Labor Department said. The weekly increase was the largest since November 2012. A Labor Department official said last week’s data had been impacted by Hurricane Harvey.