The two recent hurricanes that hit the United States raised inflation and puzzled analysts tracking job losses in Texas and Florida. Experts say the impact on the huge economy is “limited.”
Thursday’s report from the Labor Department says overall unemployment claims declined 14,000 over the past week, after jumping by tens of thousands the previous week in the wake of Hurricane Harvey.
Nationwide, 284,000 Americans signed up for unemployment assistance last week, a figure experts say is low enough to show a generally healthy job market.
Experts caution that the jobs data is likely to be “volatile” for a while, as the storms that put many people out of work also closed the government offices where jobless people file claims. PNC Bank chief economist Gus Faucher says claims from Hurricane Irma are likely to “jump” upward in Florida in coming weeks; but, Faucher says despite the storms, the nationwide labor market is “strong.” Florida is about one-twentieth of the U.S. economy, and the Florida Keys, ravaged by Irma, are just a tiny fraction of the state’s economy.
Gasoline prices have risen and may continue to increase after Hurricane Harvey’s floods and winds damaged and closed oil industry facilities, including nearly one-quarter of U.S. refineries. The lower stocks of gasoline forced buyers to pay higher prices. Refineries are gradually making repairs and resuming operations.
Those higher prices for fuel and a boost in rent costs showed up in the newest assessment of inflation, which showed the Consumer Price Index gaining 1.9 percent over the past year. Inflation and other economic data will be closely examined by top officials of the U.S. central bank as they gather next week to decide whether to reduce efforts to stimulate the economy.
IHS Markit analyst James Bohnaker says Federal Reserve leaders should be “encouraged” by “healthy” gains in prices. He says the Fed may start cutting back stimulus efforts by reducing a massive bond-buying program next week. Bohnaker and other experts say the Fed will probably not ease the other stimulus effort – very low interest rates – until December.