U.S. Jobless Claims Fell Last Week
The number of Americans filing new applications for unemployment benefits fell last week, but claims filed by federal employees jumped at the start of a partial government shutdown.
Initial jobless claims, a proxy for layoffs across the U.S., decreased by 17,000 to a seasonally adjusted 216,000 in the week ended Jan. 5, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal expected 230,000 new claims last week. That data reflects claims filed under regular state programs.
Federal employees file under a separate program, which is reported with a one-week lag. For the week ended Dec. 29, the first week of the partial shutdown, 4,760 federal employees filed for first-time benefits. That was up from 929 the prior week, and 819 a year earlier. Claims by federal workers aren’t adjusted for seasonality.
This jump was noticeably smaller when compared with the first week of the October 2013 shutdown, during which federal workers’ claims surged by about 70,000, according to analysis by Omair Sharif, senior U.S. economist at Société Générale.
The difference could be related to timing, according to Mr. Sharif, as the current shutdown’s first two weeks weren’t full workweeks because of the Christmas and New Year’s holidays.
About 380,000 federal employees have been placed on unpaid leave, or furlough, due to the shutdown and roughly 420,000 employees, deemed essential, are working without pay, according to contingency plans the affected agencies filed before the shutdown began on Dec. 22. Those federal workers may be eligible for unemployment assistance, though they would be required to repay the benefits if they receive back pay from their agencies, a Labor Department analyst said Thursday.
On the state level, federal employees’ applications for unemployment benefits were the highest in California, likely due to its overall larger population than other states. The state with the second highest number of claims for federal employees was Utah, which has a large number of national parks and federally owned land and employees that staff them. The National Park Service was one of the agencies impacted by the shutdown.
Still, there are thousands of privately employed contractors that work for the U.S. government whose projects could have potentially stalled because of the shutdown. They would qualify for regular unemployment benefits that would show up in the headline figure of jobless claims if their employers laid them off. Analysts think some of the claims filed last week were likely filed by these contractors, though the number is probably small.
“Presumably [some contracting] projects get put on hold during a shutdown, but if you expect a resolution in a few weeks, you’re unlikely to fire workers just to hire them back in” a few days, Mr. Sharif said. “My suspicion is you aren’t seeing that fallout just yet…nonessential furloughed employees aren’t getting paychecks and there doesn’t seem like there’s any light at the end of the tunnel.”
Still, last week’s decrease in regular claims suggests any layoffs of government contractors isn’t having a significant impact on the broader data, which signals the health of the overall labor market.
The four-week moving average of those claims, a steadier measure, rose last week by 2,500 to 221,750. Claims for the week ended Dec. 29, 2018 were revised up to 233,000 from 231,000.
By historic standards, claims are very low, consistent with other data suggesting the labor market is healthy. Jobless claims touched a 49-year low of 202,000 in mid-September before rising modestly following two hurricanes striking the Southern U.S., and wildfires in California. Claims fell sharply in early December, but then edged up for three weeks before last week’s decline.
More broadly, the U.S. labor market is on solid footing. The unemployment rate rose to a 3.9% in December, but that figure was just above a near half-century low and the increase reflected more Americans joining the labor force at a time when job openings are plentiful and wages are rising.
Thursday’s report showed the number of claims workers made for longer than a week decreased by 28,000 to 1,722,000 in the week ended Dec. 29. The figure, also known as continuing claims, is reported with a one-week lag.
Source: Dow Jones