The number of growing Americans who are filing for unemployment benefits has seen a steady increase during last week. According to the latest reports from the Labor Department, initial claims for state unemployment benefits grew by 6,000 to a seasonally adjusted total of 225,000 for the week ending 28 September. 

Despite the increase, claims remain consistent with a stable labour market, mainly due to low layoff rates. However, the stability is expected to be disrupted by Hurricane Helene, which caused widespread damage across several southeastern states, with 162 fatalities. Homeland Security Secretary Alejandro Mayorkas indicated that recovery will require a multibillion-dollar effort over several years. 

Additionally, strikes by 30,000 Boeing machinists and 45,000 dockworkers may further strain the labour market, with Boeing already implementing temporary furloughs for thousands of workers, including many executives and managers.

The report highlighted that the number of individuals receiving continued benefits, a key measure of hiring trends, dropped by 1,000 to a seasonally adjusted 1.826 million for the week ending 21 September. Previously, claims had surged to over 2.5-year highs in July due to policy changes in Minnesota. 

This labour market slowdown is largely attributed to the Federal Reserve’s interest rate hikes aimed at curbing inflation. Last month, the Fed reduced its benchmark interest rate by 50 basis points, marking the first cut since 2020, with further reductions expected later this year.

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