Economists polled by Reuters had forecast 205,000 claims for the past week. The “claims data” includes last Monday’s Martin Luther King Jr. holiday.Claims are often volatile around holidays. The data was already choppy due to difficulties in adjusting the figures for seasonal fluctuations around the year-end and New Year holidays. More volatility is likely in the coming weeks after a winter storm blanketed much of the country in snow and freezing temperatures this weekend.
Claims have remained generally low by historical standards, with companies reluctant to lay off workers as they assess what economists call an ever-changing economic landscape tied mainly to tariffs on imports.
United Parcel Service and Amazon.com announced job cuts this week, but those layoffs are unlikely to have a significant impact on claims. The high-profile layoffs last year, including by the two companies, did not lead to a notable increase in applications for unemployment benefits. Federal Reserve Chairman Jerome Powell told reporters on Wednesday that “labor market indicators suggest conditions could stabilize after a period of gradual softening.” The US central bank left its key daily interest rate in the range of 3.50%-3.75%.
CONSUMERS PESSIMISTIC ABOUT LABOR MARKET The number of people receiving unemployment benefits after an initial week of relief, a proxy for hiring, fell by 38,000 to a seasonally adjusted 1.827 million in the week ended Jan. 17, the claims report showed. The so-called continuous claims data has also been affected by seasonal adjustment challenges.
Some people may also no longer be entitled to benefits, which in most states is limited to 26 weeks. Persistent claims covered the period when the government surveyed households for January’s unemployment rate.
The unemployment rate fell from 4.5% in November to 4.4% in December. The unemployment rate is likely to remain high this month. The Conference Board’s employment measures worsened in January. Economists attributed the tepid hiring to tariffs and immigration raids that have reduced labor supply and demand, and to companies being uncertain about their staffing needs as they invest heavily in artificial intelligence. The Bureau of Labor Statistics’ closely watched January employment report, due next Friday, could be delayed if the government shuts down again this weekend after a second fatal shooting recently by federal agents in Minneapolis.
Democrats in the U.S. Senate have said they would vote against funding legislation that includes money for the Homeland Security Department, which oversees ICE, the federal immigration agency. Congress faces a January 30 deadline to fund the government or risk a partial government shutdown.
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