Last week’s bad weather appears to have played a role in the U.S. job market as the number of Americans filing new applications for unemployment benefits rose more than expected.
According to statistics released by the Labor Department Thursday showed the biggest rise in weekly jobless claims in nearly two months, and the numbers were likely affected by snowstorms across much of the country, as well as normalization after volatility linked to difficulties adjusting the data for seasonal fluctuations around the holiday season and at the turn of the year, according to a report from Reuters.
“There is no sign of the kind of layoffs we expect to see in a weakening labor market during the early days of a recession,” Carl Weinberg, chief economist at High Frequency Economics, told Reuters. “The level of claims is just very low. Claims are well within the recent range over the last two years.”
Initial claims for unemployment benefits jumped 22,000, the largest increase since early December, to 231,000 for the week ended January 31, the Labor Department said. Economists polled by Reuters had forecast 212,000 claims for the latest week.
Heavy snow and freezing temperatures blanketed large portions of the country towards the end of January, which could have left some people unemployed temporarily, Reuters reported. Unadjusted claims shot up in states impacted by the storms, going up 5,301 in Pennsylvania and 3,421 in New York. They rose 2,214 in New Jersey. There were also notable increases in applications in Illinois, Missouri, Ohio and Wisconsin.
The Reuters report pointed out that, through the distortions, the labor market remains in what economists call a “low hire, low fire” mode. The four-week moving average of claims rose 6,000 to 212,250.
“Little has changed in the labor market since the fourth quarter,” Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, told Reuters.
The number of people receiving unemployment benefits after an initial week of aid increased 25,000 to a seasonally adjusted 1.844 million during the week ended January 24, the claims report showed. The so-called continuing claims had declined for three straight weeks, with economists also citing seasonal adjustment issues at the start of the year. The unemployment rate is forecast to have held steady at 4.4%. Economists say labor market stability could encourage the Federal Reserve to keep interest rates unchanged through the first half of the year. The U.S. central bank last week left its benchmark overnight interest rate in the 3.50%-3.75% range.
