WASHINGTON (Reuters)

The number of Americans filing new applications for unemployment fell last week as the distortions from hurricanes faded.

Initial claims for state unemployment benefits dropped by 12,000 to a seasonally adjusted 216,000 for the week ended Oct. 26, according to the Labor Department on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.

Claims surged early in the month due to Hurricane Helene disrupting economic activity in the Southeast and remained elevated after Hurricane Milton impacted Florida. Filings were also boosted by striking factory workers at Boeing (NYSE:BA), leading the planemaker to implement rolling furloughs. This strike has negatively affected Boeing's suppliers.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased by 26,000 to a seasonally adjusted 1.862 million during the week ending Oct. 19, according to the claims report.

Despite the hurricanes and strike volatility, the labor market picture has likely remained stable.

A report from global outplacement firm Challenger, Gray & Christmas on Thursday showed planned layoffs by U.S.-based employers dropped by 23.7% to 55,597 in October.

However, the storms and labor disputes likely constrained job growth in October. The Labor Department reported that there were 41,400 workers on strike during the period employers were surveyed for October's employment report, which includes workers at Boeing and three hotel chains.

Economists estimate that the drag on payrolls from Helene and Milton could reach as much as 70,000.

A Reuters survey estimated nonfarm payrolls probably increased by 113,000 jobs this month after a rise of 254,000 in September, with the unemployment rate forecast to remain unchanged at 4.1%.

The Labor Department is set to publish October's employment report on Friday. Economists expect that Federal Reserve officials may overlook the employment report in their upcoming meeting and proceed to cut interest rates by 25 basis points.

The U.S. central bank initiated its policy easing cycle last month with a substantial half-percentage-point interest rate cut, marking the first reduction in borrowing costs since 2020. The Fed's policy rate currently stands in the 4.75%-5.00% range, following a cumulative increase of 525 basis points in 2022 and 2023.