US jobless claims jump to 211,000; led by New York, California
APPLICATIONS for US unemployment benefits last week rose to the highest since December, driven by spikes in California and New York and suggesting some softening in what is still a tight labour market.
Initial unemployment claims increased by 21,000 to 211,000 in the week ended Mar 4, Labor Department data showed on Thursday (Mar 9). The figure surpassed all economists’ forecasts. The median estimate was for 195,000 applications.
Continuing claims – which include people who have received unemployment benefits for a week or more and are a good indicator of how hard it is for people to find work after losing their jobs – surged 69,000 to 1.72 million in the week ended Feb 25, the biggest jump since November 2021.
On an unadjusted basis, claims jumped by more than 35,000 to 237,513. California and New York accounted for three-quarters of the increase. Severe weather across the Midwest and California may have been a factor.
The figures may also have been boosted by New York City school workers who have negotiated into their contracts the ability to file for unemployment benefits when there is a school break, according said Stephen Stanley, chief US economist at Santander US Capital Markets.
“This week’s tally was inflated by the New York City school holiday,” Stanley said in a note.
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Additionally, technology, media and financial companies have announced tens of thousands of job cuts in recent weeks.
Despite the jump in claims, the labour market remains robust. Reports on private payrolls and jobs openings released this week showed solid hiring and demand for workers.
Federal Reserve chair Jerome Powell testified before Congress this week that should economic data continue to come in strong, the central bank could hike interest rates at a faster pace, though policymakers have not made a decision yet for their upcoming policy meeting.
Much of that will depend on Friday’s government jobs report, which economists reckon could tilt the balance in favour of bigger interest rate hikes. Estimates call for 225,000 payrolls in February and for the unemployment rate to hold at a five-decade low.
The claims data can be choppy from week to week and especially around holidays, and the figures came near Presidents’ Day. The four-week moving average in initial claims, which smooths out some of the volatility, edged up to 197,000, the highest since January. BLOOMBERG
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