The surge in jobless claims in late January came to a crashing halt last week as the number of people applying for unemployment benefits fell by 9,000 to 218,000.
Economists had expected 222,000 claims, according to Econoday’s survey. The prior week’s figure was revised up to 227,000 from the preliminary estimate of 224,000.
Winter storms that struck much of the country in the middle of January may have created volatility in the jobless claims figures. Claims fell to 189,000 in the week that ended on January 13, the lowest level since September of 2022.
The surge in claims that followed was likely the result of layoffs delayed by the storms.
Claims are often turbulent in January as businesses adjust staffing levels following holidays and prepare for the new year. The Department of Labor adjusts claims numbers to take account for seasonal volatility.
Before seasonal adjustment, claims totaled 232,727, a decline of 31,192 from the prior week’s unadjusted estimate.
Ongoing claims for unemployment, which are a proxy for how much difficulty workers are having finding new employment, fell in the prior week by 23,000 to 1,871,000. These are reported with a one-week delay. The trend in ongoing claims has been for a slight decline over the past three months.
By historical standards, claims are very low and a sign of an economy with strong demand for labor. Unless claims rise significantly in the months ahead, it will be difficult for the Federal Reserve to justify a rate cut.
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