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The number of Americans on jobless benefits surged between mid-September and mid-October, government data showed on Tuesday, suggesting an elevated unemployment rate in October as an uncertain economic environment discourages hiring.Â
The Labor Department only published the so-called continuing claims data for the weeks ending October 11 and 18. The government would have surveyed businesses and households for October’s employment report during the week ending October 18.Â
No explanation was given. No official weekly claims data had been published since late September because of the recently ended 43-day shutdown of the government. The White House has warned the unemployment rate for October will likely not be published after the longest shutdown in history prevented the collection of data from households.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 10,000 to a seasonally adjusted 1.957 million during the week ended October 18, the data showed. Continuing claims shot up from the 1.916 million level in the week ended September 13.
The substantial increase in continuing claims between the September and October survey weeks would suggest a high unemployment rate in October, and is consistent with lethargic hiring. A report from ADP showed private employers shed an average of 2,500 jobs a week during the four weeks ending November 1.
The BLS will publish the delayed September employment report on Thursday. The unemployment rate was near a four-year high of 4.3% in August. First-time applications for benefits were, however, unchanged between the September and October nonfarm payrolls survey period, which some economists welcomed as a sign that the labor market was not deteriorating.
“That means there is no confirmation in this report of widely circulating theories that layoffs stepped up during the government shutdown,” said Carl Weinberg, chief economist at High Frequency Economics.Â
“This should be reassuring to markets, and it should reduce expectations for a Fed rate cut in December.”
Federal Reserve officials have signaled a reluctance to lower rates again next month.
Homebuilder Sentiment Remains Subdued
Labor market sluggishness and the accompanying concerns about household finances are hampering the housing market, with homebuilder sentiment subdued in November for the 19th straight month, other data showed. The National Association of Home Builders/Wells Fargo Housing Market Index ticked up one point to 38 this month. Economists polled by Reuters had forecast the index unchanged at 37.
“Still relatively high mortgage rates, a weak labor market, and elevated home prices all suggest that a big run-up in new home sales is unlikely in the near term,” said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.Â
“A meaningful turnaround in the housing market likely will have to wait until mid-2026, when we expect further falls in mortgage rates to be paired with stronger growth and a gradual improvement in the jobs market.”
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Lack of affordable housing has become a political hot-button issue. President Donald Trump this month floated the idea of a 50-year mortgage to make housing affordable, an idea that was panned by some of his supporters and housing market experts who argued it would result in homeowners paying more in interest and taking longer to build equity.Â
The National Association of Realtors this month estimated the median age of first-time buyers was 40 years. In the 1980s, the typical home buyer was in their late 20s, the NAR said.
The survey’s measure of current sales conditions increased two points to 41 this month, while its gauge of future sales fell three points to 51. A measure of prospective buyer traffic gained one point to 26. The share of builders reporting cutting prices increased to 41%, the highest since May 2020. The average price reduction was unchanged at 6%, while the share using incentives was 65%, holding steady since September.Â
“More builders are using incentives to get deals closed, including lowering prices, but many potential buyers still remain on the fence,” said NAHB Chairman Buddy Hughes.
(Reporting by Lucia Mutikani and Dan Burns; Editing by Chizu Nomiyama and Andrea Ricci )
