The beginning of this September witnessed the American applications for unemployment benefits surge to its highest level in more than two years because of the tremendous devastation caused by Hurricane Harvey.
Initial jobless claims in the period from Aug 27 to Sept 2 reported by the Labor Department on this Thursday showed a strong rise of 62,000 to a seasonally adjusted 298,000, higher than economist’s forecasts of around 242,000 polled by Marketwatch. This was the highest number since April 2015, and also the largest weekly increase counted from November 2012. A Labor Department official announced that the figure had been affected by the biggest hurricane of the year, up to the present time.
New claims counted Americans who had applied for unemployment benefits after being jobless. Hurricane Harvey flooding Houston not only disrupted oil & petrochemical production but also caused dozens of businesses to close and plenty of people unable to get to work. Texas – the most damaged area – saw the unadjusted claims climb fivefold to nearly 64,000. The unemployed citizens had no choice but to seek for temporary financial assistance.
Economists predicted that this storm could fairly hurt the third-quarter gross domestic product data, but expected the loss to be recovered in the final three months of 2017.
Despite the rising jobless claims, U.S. labor market has still been firm. Until Hurricane Harvey started, the claiming figure had nearly approached the lowest level in 45 years. 17 million jobs have been added since 2010, sending the unemployment data to a 16-year low. In addition, the Labor Department confirmed in the second report on this Thursday that worker productivity rose at a 1.5% annualized rate in Q2 from its past data of 0.9% in August. The government also altered the second-quarter gross domestic product growth to 3% from its previous broadcast of 2.6%.
Meanwhile, related labor figures have been relatively positive. Hours worked climbed by 2.5% in the April-June period as previously divulged, marking the quickest improve since Q4 2015, and followed an increase of 1.6% in the first quarter. Output per worker rose by 4%, the fastest level since Q3 2014, after growing by 1.8% at the beginning of the year. Unit labor costs which surged by 4.8% in the first three months of this year were prior affirmed to have increased by 0.6%.