US weekly jobless claims fall slightly; prior week's data revised up

[WASHINGTON] The number of Americans filing new applications for unemployment benefits fell slightly last week, still consistent with a relatively low level of layoffs, though lacklustre hiring is stoking anxiety among households over the labour market.

Initial claims for state unemployment benefits dropped 1,000 to a seasonally adjusted 209,000 for the week ended January 24, the Labor Department said on Thursday (Jan 29). The prior week’s level of claims was revised up by 10,000 to 210,000.

Economists polled by Reuters had forecast 205,000 claims for the latest week. The claims data included last Monday’s Martin Luther King Jr holiday.

Claims tend to be volatile around public holidays. The data had already been choppy amid difficulties adjusting the numbers for seasonal fluctuations around the year-end holiday season and turn of the year. More volatility is likely in the weeks ahead after a winter storm blanketed a large part of the country over the weekend with snow and freezing temperatures.

Claims have generally remained low by historical standards, with companies reluctant to lay off workers while assessing what economists have called an ever-shifting economic landscape, mostly related to tariffs on imports.

United Parcel Service and Amazon.com announced job cuts this week, but those layoffs will probably not have a significant impact on claims. High-profile layoffs last year, including by the two companies, did not result in a notable surge in jobless claims. Federal Reserve Chair Jerome Powell told reporters on Wednesday that “labour market indicators suggest that conditions may be stabilising after a period of gradual softening.” The US central bank left its benchmark overnight interest rate in the 3.50 per cent to 3.75 per cent range.

The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, decreased 38,000 to a seasonally adjusted 1.827 million during the week ended January 17, the claims report showed.

The so-called continuing claims data has also been impacted by the seasonal adjustment challenges.

Some people have also likely exhausted their eligibility for benefits, limited to 26 weeks in most states. Continuing claims covered the period during which the government surveyed households for January’s unemployment rate.

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The jobless rate slipped to 4.4 per cent in December from 4.5 per cent in November. The unemployment rate likely remained elevated this month. The Conference Board’s employment measures deteriorated in January. Economists attributed tepid hiring to tariffs and immigration raids that have reduced demand and supply of labour as well as businesses being uncertain of their staffing needs as they invest heavily in artificial intelligence. The Bureau of Labor Statistics’ closely watched employment report for January, scheduled for release next Friday, could be delayed if the government shuts down again at the weekend following a second fatal shooting by federal agents in Minneapolis recently.

Democrats in the US Senate have said they would vote against funding legislation that includes money for the Homeland Security Department that oversees ICE, the federal immigration agency. Congress faces a January 30 deadline to fund the government or risk a partial government shutdown. REUTERS