US weekly jobless claims increase marginally

[WASHINGTON] The number of Americans filing new applications for unemployment benefits increased less than expected last week, suggesting the labour market maintained a steady pace of job growth in January.

Initial claims for state unemployment benefits rose 1,000 to a seasonally adjusted 200,000 for the week ended January 17, the Labor Department said on Thursday (Jan 22). Economists polled by Reuters had forecast 210,000 claims for the latest week.

Challenges adjusting the data for seasonal fluctuations around the year-end holiday season and turn of the year have made claims noisy in recent weeks. But through the volatility, the labour market has remained in what economists and policymakers call a “low-hiring, low-firing” state.

Economists say President Donald Trump’s aggressive trade and immigration policies have reduced both demand for and supply of workers. Businesses are also unsure of their staffing needs as they invest heavily in artificial intelligence, limiting hiring.

The claims data covered the period during which the government surveyed employers for the nonfarm payrolls component of January’s employment report. Nonfarm payrolls increased by 50,000 jobs in December, roughly in line with the monthly average for 2025.

The Bureau of Labor Statistics’ (BLS) annual payrolls benchmark revision, to be published with January’s employment report next month, is likely to show the loss of momentum started in 2024. The BLS has estimated about 911,000 fewer jobs were created in the 12 months through March 2025 than previously reported.

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The overcounting has been blamed on the birth-death model, which is used by the BLS to estimate how many jobs were gained or lost because of companies opening or closing in a given month. Starting with the January report, the BLS will change the birth-death model by incorporating current sample information each month. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, fell 26,000 to a seasonally adjusted 1.849 million during the week ended January 10, the claims report showed.

Part of the decline in the so-called continuing claims is likely due to some people exhausting their eligibility for benefits, limited to 26 weeks in most states. Laid-off people are finding it difficult to land new work opportunities, evident in surveys of consumers. REUTERS