US Weekly Jobless Claims Lowest Since 1969

REUTERS/Monica Almeida

The number of Americans filing applications for unemployment benefits fell to more than a 49-year low last week, but the drop likely overstates the health of the labor market as claims for several states including California were estimated.

Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 199,000 for the week ended Jan. 19, the lowest level since mid-November in 1969 when 197,000 applications were recorded, the Labor Department said on Thursday. Data for the prior week was revised lower to show 1,000 fewer applications received than previously reported.

Economists polled by Reuters had forecast claims rising to 220,000 in the latest week. The Labor Department said claims for California, Kansas, North Dakota, Virginia, West Virginia and Hawaii were estimated last week because of Monday’s Martin Luther King holiday.

This suggests last week’s surprise decline in claims probably exaggerates the labor market’s health. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 5,500 to 215,000 last week.

An ongoing partial shutdown of the federal government so far appears to be having a limited impact on the claims data. The number of federal workers filing for jobless benefits rose 14,965 to 25,419 in the week ending Jan. 12. Claims by federal workers are reported with a one-week lag.

About one-quarter of federal agencies have been shuttered since Dec. 22, impacting 800,000 government employees, with many working without pay and others furloughed. All workers will be paid retroactively when the shutdown ends.

But economists expect the longest shutdown in history will push the unemployment rate above 4.0 percent in January as the furloughed workers would be considered unemployed.

The jobless rate rose two-tenths of a percentage point to 3.9 percent in December as strong labor market conditions attracted some unemployed people back into the labor force.

Thursday’s claims report showed the number of people receiving benefits after an initial week of aid decreased 24,000 to 1.71 million for the week ended Jan. 12. The four-week moving average of the so-called continuing claims rose 1,250 to 1.73 million.

The continuing claims data covered the week of the household survey from which January’s unemployment rate will be calculated. Continuing claims rose 5,000 between the December and January survey periods.

If there were no government shutdown, the modest increase in continuing claims between the survey weeks would suggest little change in the unemployment rate this month.

(Reporting by Lucia Mutikani Editing by Paul Simao)

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