Step away from the ledge, everybody; and pay no attention to the DOOOMers, who are surely out in force this morning: the big increase in initial claims was almost all about Hurricane Helene.

By the numbers, initial claims increased 33,000 to 258,000, the highest number since August 2023. The four week moving average increased 6,250 to 231,000, the highest in a month. Continuing claims, with the usual one week delay, increased 42,000 to 1.861 million, the highest since mid-August:

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On a YoY basis, initial claims were up 22.3%, the four week average up 8.7%, and continuing claims up 3.4%:

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I won’t bother with the “Sahm Rule” unemployment rate comparison this week, partly because this is only the first week of the month, and partly because of what I discuss below.

If there were no special factors, I would be very concerned about a jump In claims as occurred this week. But my very first thought when I heard the numbers was, “Was there a natural disaster last week?” And of course there was, in the form of Hurricane Helene, which hit the panhandle of Florida with a record storm surge before pummeling the southern Appalachians, especially western North Carolina.

So I immediately went to the table of state by state changes, and here are the five biggest increases (*not* seasonally adjusted) in state level claims for last week:

MI +9,490

NC +8,534

CA +4,484

OH +4,328

FL +3,842

For contrast, here are the other two big States:

TX +1190

NY +544

I’m not sure what the story was in Michigan and Ohio, but it’s pretty clear why North Carolina had such a big jump. Neighboring TN, also impacted by Helene, also increased by +1,836. NC and FL alone were responsible for 23% of the entire non-seasonally adjusted increase of 53,570. 

We have seen similar increases after past hurricanes. In 2005, claims increased 96,000 just after Katrina. In 2012, they increased 81,000 right after Sandy. And in 2017, they jumped 50,000 immediately after Harvey. In all these cases, the big increases were in the States most impacted by the storms.

All of which means that next week we can expect to see a further sharp increase, driven by more Florida claims in the aftermath of Milton. We’ll see what happens with Michigan and Ohio, but unless I find a specific reason for their jump, I’ll expect a decline back to normalcy there.

So take a deep breath. Initial jobless claims are not signaling recession this week. They are signaling hurricane season.

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