WASHINGTON (AP) — Fewer people sought unemployment benefits last week as the impact of last month's hurricanes on the U.S. economy fades.
THE NUMBERS: Applications for U.S. unemployment aid fell 15,000 last week to a seasonally adjusted 243,000. Applications fell in Texas and Florida, where Hurricanes Harvey and Irma inflicted heavy damage in late August and September.
The number of people receiving benefits nationwide fell 32,000 to a seasonally adjusted 1.89 million, the lowest level since late December 1973.
KEY DRIVERS: Applications had spiked to 298,000 after Harvey hit Texas in late August, but have mostly fallen since then. The number of people seeking unemployment aid in Puerto Rico also fell last week, though that may reflect ongoing power outages and other damage, a department spokesman said. That has likely made it harder for residents to apply.
The hurricanes forced thousands of businesses to shut down and cost the U.S. economy 33,000 jobs in September, the Labor Department said last week. But outside of the hurricane-impacted areas, the job market looks solid.
The unemployment rate fell in September to 4.2 percent, a 16-year low, from 4.4 percent in August, as many unemployed workers in parts of the country unaffected by the hurricanes found jobs.
THE TAKEAWAY: Applications are a proxy for layoffs, so the decline points to a healthy job market. Businesses are optimistic about future demand and are holding onto their workers.
The hurricanes are expected to weigh on the economy in the July-September quarter. Economists forecast growth will slip to about 2 percent at an annual rate, down from 3.1 percent in the April-June quarter. But the economy should rebound as rebuilding and repairing damage from the hurricanes gets under way. Growth will likely reach 2.5 percent in the final three months of the year, analysts expect.