The United States Department of Labor released the latest report that shows things are not looking good if you are looking for a job. Apparently initial claims for state unemployment benefits—so first-time applicants—jumped by 53,000 to a seasonally adjusted 253,000 for the week ending January 26th. This is the highest number for this metric since September of 2017, which was also when the metric saw its last big increase.
Just one week before, these initial claims fell by 13,000, which dropped the total number of claims to just shy of 200,000. This is actually the lowest level for the metric since October of 1969. And, last week, some economists had only expected to see numbers rise by 15,000.
While the number is than thrice what they expected, economists also recognize that these numbers are unique from previous years for a few reasons. First of all, this data covers the Martin Luther King, Jr holiday, but this year’s holiday falls at a later time than previous years. Also, federal government workers have been unemployed because of the longest shutdown in US history, and that could be a contributor to this significantly higher number. As a matter of act, federal civilian employees contributed 25,419 of these initial jobless claims during the week ending January 12, while 15,000 had filed their initial claims the week before.
It is also very important to remember that this surge in initial claims, comes at a time when business strength and consumer confidence are both deteriorating at an alarming rate.
Now this is just part of a bigger picture, of course. For example, the four-week moving average (which takes into account cyclic trends all year long) is considered a more consistent measure of the labor market, and it rose only 5,000 (to 220,250) last week. It should also be noted that these claims are not related to January’s employment report. Those numbers will be released on Friday. And, when it does come out, many economists anticipate it will reflect growth in non-farm payrolls by 165,000, nearly half of the increase from December.