The number of Americans receiving benefits reached its highest level in over three years, while new claims for US unemployment insurance saw a slight increase. Continuing claims, which represent those who are still receiving benefits and unable to find work, rose to 1.9 million during the week ending January 11, marking the highest level since November 2021, according to data from the Labor Department released on Thursday. Initial claims went up by 6,000 to 223,000 last week.
New claims have remained close to pre-pandemic averages, indicating a relatively strong labor market. However, as per the experts, the increase in ongoing claims suggests that more people are struggling to secure new employment.
Weekly data is often volatile, especially at this time of year, the officials said. The four-week moving average of new claims, which smooths out fluctuations, saw a small rise to 213,500.
Stephen Stanley, Chief Economist at Santander US Capital Markets LLC, noted that weekly data can be erratic during this season, and factors like weather and natural disasters could keep numbers fluctuating in the coming weeks.
Economists are closely monitoring labor data for the week ending January 18, as it aligns with the survey period used for this month’s employment report. This period saw devastating wildfires in Los Angeles.
“Jobless claims stayed relatively low during the survey week for the January jobs report, suggesting little change in the unemployment rate despite the California wildfires. The administration’s pro-business stance may encourage capital spending and hiring, but President Donald Trump’s executive orders to reduce federal government employment could increase the unemployment rate.”
Before seasonal adjustments, initial claims dropped by about 68,000 last week, marking the largest decrease in three years. Four states, including California, provided only estimates, with California seeing the largest increase in claims after a surge the previous week.
