Jobless Claims Fall to 234,000 as Shutdown Boost Rolls Off

A man waits to cross a street during heavy snow fall in downtown Manhattan on January 30, 2019 in New York City. - Bitter cold with temperatures lower than Antarctica gripped the American Midwest on Wednesday, grounding flights, closing schools and businesses and raising frostbite and hypothermia fears for homeless …
JOHANNES EISELE/AFP/Getty Images

The number of Americans filing applications for jobless benefits fell last week but remained well-above the near 50 year lows seen at the end of last year and the start of 2019.

Initial claims for state unemployment benefits decreased 19,000 to a seasonally adjusted 234,000 for the week ended February 2, the Labor Department said on Thursday. Data for the prior week was unrevised at 253,000.

Economists polled by Reuters had forecast claims falling by even more, to 222,000 in the latest week.

Claims had sharply risen in the final week of the government shutdown, perhaps because of layoffs by private companies with government contracts. As well, some private employers reported difficulty with background checks for employees due to the shutdown.

The four-week moving average of initial claims, considered a better measure of labor market trends because it smoothes out week-to-week volatility, rose by 4,25- to 1,741,250. The previous week’s average was revised down by 750 from 1,737,750 to 1,737,000.

Initial claims for UI benefits filed by workers considered “former Federal civilian employees”, which include those locked out of work by the shutdown, totaled 6,669 in the week ending January 26, a decrease of 8,070 from the prior week. There were 57,389 former Federal civilian employees claiming UI benefits for the week ending January 19, an increase of 17,277 from the previous week.

Despite coming in higher than recent lows, the most recent number still represents a very low level of jobless claims by historical standards. Claims are a proxy for layoffs and the low-levels suggest that the trade dispute with China and tariffs on metals are not causing U.S. companies to lay off employees.

The weather was particularly cold and snowy in much of the country during the week ended February 2, which may have slowed hiring and kept more people on the unemployment rolls, boosting continuing claims.

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