Filings for U.S. unemployment benefits fell by less than expected last week, signaling it may take longer for the labor market to return to its previous trend following the partial government shutdown.
Jobless claims declined to 234,000 in the week ended Feb. 2, above economist forecasts for 221,000 after the highest reading in more than a year, Labor Department figures showed Thursday. The four-week average, a less volatile measure, increased to 224,750, an eight-week high.
The smaller-than-expected decline in claims suggests some effects of the longest-ever U.S. federal shutdown may still be rippling through the economy. Even so, the Labor Department’s monthly employment report last week showed job gains remained robust in January.
While federal workers’ claims aren’t factored into the headline numbers, contractors and businesses were hit by the shutdown, potentially boosting the weekly figures. Recent claims figures may also reflect typical seasonal volatility around holidays, as the prior week included Martin Luther King Jr. Day.
Initial filings by federal employees, data reported with a one-week lag, fell by 8,070 to 6,669 on an unadjusted basis in the week ended Jan. 26, the final week of the shutdown.
While the prior week’s jump in overall claims may continue to reverse now that agencies have reopened, the closure likely reduced economic growth in the first quarter, and President Donald Trump has threatened to shut down the government again if his demands for a U.S.-Mexico border wall aren’t met.
Continuing claims, which are reported with a one-week lag, fell by 42,000 to 1.736 million in the week ended Jan. 26.
The unemployment rate among people eligible for benefits held at 1.2 percent for a ninth week.
No states had estimated claims last week. The previous week’s claims were unrevised at 253,000, the highest tally since September 2017.
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Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments.
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.