The Labor Department unveiled a report last Thursday which revealed a higher rebound than expected in initial jobless claims for the week ending January 20. This follows an over-year low in first-time claims for US unemployment benefits reported the prior week.
The Department said initial jobless claims rose to 214,000, an uptick of 25,000 from the preceding week's revised level of 189,000. This growth was greater than what economists had predicted. They forecasted a rise to 200,000 from the originally reported 187,000 jobless claims for the previous week.
Despite this increase, jobless claims the week prior were still the lowest since the count of 182,000 during the week ending September 24, 2022. Expert Nancy Vanden Houten, Leading U.S. Economist at Oxford Economics, attributed the unexpected surge in jobless claims for the week ending January 20 to residual seasonal noise that enabled another drastic swing.
Simultaneously, the report revealed a drop in the less volatile four-week moving average to 202,250 —a decrease of 1,500 from the preceding week's revised average of 203,750.
The report also showed a rise in continuing claims, which are a measure of people receiving ongoing unemployment support. It increased by 27,000 to 1.833 million for the week ending January 13th. Nevertheless, the four-week moving average of continuing claims lowered to 1,835,000, marking a dip of 13,250 from the previous week's revised average of 1,848,250.
Regarding these findings, Vanden Houten commented, "The seasonal volatility in claims is largely behind us. We may see a modest rise in claims as labor market conditions ease further with growth deceleration in 2024." She continued, "We don't anticipate a sharp rise in claims, however, as we expect job growth to be slower but remain positive."
The Labor Department is slated to release its more anticipated report on the employment situation for January this coming Friday.
