U.S. Jobless Claims Hit Four-Week High Amid Federal Shutdown

(Bloomberg) -- Filings for U.S. unemployment benefits rose to a four-week high at year’s end, amid holidays that tend to make the figures more volatile and a partial government shutdown that may have spurred federal workers to request funds.

Jobless claims increased to 231,000 in the week ended Dec. 29, above the 220,000 median estimate of economists, Labor Department figures showed Thursday. Continuing claims, which are reported with a one-week lag, rose to the highest since late July.

Key Insights

• The increase potentially reflects filings from workers affected in the first week of the shutdown, which has caused the furlough of an estimated 350,000 federal employees. Because details on jobless claims by federal employees are reported with a lag, it will take more time to determine how much of the latest rise is due to the shutdown.
• Analysts caution that it’s also difficult to gauge the underlying trend of claims around holidays, amid factors such as seasonal hiring and vacations that typically make the figures more volatile than usual. Last week included Christmas and preceded New Year’s Day.
• Recent stock-market declines and weakness in manufacturing and housing suggest economic growth will moderate in 2019, and jobless claims are a key leading indicator of the labor market’s health.
• Even with the rise, claims are near the lowest since 1969, and Friday’s monthly employment report is projected to show the broad job market remained solid in December.

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• The four-week average of initial claims, a less-volatile measure, fell to 218,750 from 219,250.
• The previous week’s claims were revised up to 221,000 from 216,000.
• The unemployment rate among people eligible for benefits was unchanged at 1.2 percent.
• California and Virginia had estimated claims last week.

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