On Thursday, just ahead of the forthcoming significant monthly jobs report, the Labor Department announced an unexpected minor increase in first-time applications for U.S. unemployment benefits for the week ending January 27th.
The Department's report indicated that initial unemployment claims rose by 9,000, reaching a total of 224,000. This is an increase from the revised count of 215,000 claims filed the previous week. Most economists predicted a slight fall in claims to 212,000 from the initially reported 214,000 the week prior.
The recent tally suggests that unemployment claims are slowly increasing after declining to their lowest levels since September 2022, in the week leading up to January 13th. Oxford Economics' Lead U.S. Economist, Michael Pearce, found the increase of 9,000 claims last week contrary to his expectations of a smaller drop.
However, Pearce noted that despite seasonal fluctuations, the steady low level of claims over the past five months does indicate continuity in low layoff rates. He pointed out the expected conclusion of the volatility due to seasonal changes affecting claim counts. However, he does not foresee a steep increase in claims, noting that although job growth may decelerate, it might remain positive.
The less fluctuating four-week moving average also recorded a slight increase, up to 207,750 or an increase of 5,250 from the previous week's revised average of 202,500. The Labor Department’s report also highlighted that ongoing claims, a measure of people receiving continuous unemployment assistance, rose by 70,000 to 1.898 million for the week ending January 20th.
There was a corresponding minor increase in the four-week moving average of ongoing claims to 1,841,250, up by 7,500 from the prior week's revised average of 1,833,750.
This Friday, the Labor Department aims to reveal its long-anticipated report on January's employment rate. Current speculations by economists anticipate the addition of 180,000 jobs in January, compared to a leap of 216,000 jobs in December. At the same time, they forecast a slight increase in the unemployment rate to 3.8 percent from the earlier 3.7 percent.
