Economic paper

Jobless Claims Jumped Last Week

Initial claims, a proxy for layoffs across the U.S., increased to 253,000, the highest level since Sept. 30

By 

Harriet Torry and 

Sarah Chaney

Jan. 31, 2019 8:33 a.m. ET

WASHINGTON—The number of Americans filing applications for new unemployment benefits rose sharply last week, although claims filed by federal employees ticked down during the fourth week of a monthlong partial government shutdown.

Initial jobless claims, a proxy for layoffs across the U.S., increased by 53,000 to a seasonally adjusted 253,000 in the week ended Jan. 26, the Labor Department  said Thursday . That was the highest level for initial claims since Sept. 30, 2017.

Economists surveyed by The Wall Street Journal expected 215,000 new claims last week. Claims for the previous week were revised to 200,000. That still marked the lowest level since 1969, despite the upward revision.

The jump in claims could be due to several factors, including a shorter workweek due to the Martin Luther King public holiday. The headline jobless claims number doesn’t include federal employees, who file for unemployment benefits under a different system, although the number would include contractors potentially impacted by the federal government shutdown.

The four-week moving average of claims, a steadier measure, rose last week by 5,000 to 220,250.

Thursday’s report showed the number of claims workers made for longer than a week increased by 69,000 to 1,782,000 in the week ended Jan. 19. The figure, also known as continuing claims, is reported with a one-week lag.

The report also shed further light on how some federal employees responded to the partial government shutdown, which ended on Jan. 25.

Federal employees file under a separate program than regular state programs. Federal claims are reported with a one-week lag.

For the week ended Jan. 19, the fourth week of the partial government shutdown, 14,739 federal employees filed for first-time benefits. That was down from 25,419 in the prior week. Claims by federal workers aren’t adjusted for seasonality.

More broadly, the U.S. labor market is tight, leaving businesses reluctant to let workers go. The unemployment rate was 3.9% in December, and nonfarm payrolls rose a seasonally adjusted 312,000, the Labor Department said in early January. That compared with the average gain of 215,000 a month over the previous five years.

Economists surveyed by The Wall Street Journal expect the unemployment rate in January held steady at 3.9%, and employers added 170,000 new jobs. The Labor Department will release the jobs report for January on Friday.

Economy Notches 100th Straight Month of Increased Employment

Nonfarm payrolls rose a seasonally adjusted 304,000 in January

By 

Eric Morath

Updated Feb. 1, 2019 10:12 a.m. ET

WASHINGTON—Tested in January by a 35-day government shutdown, market volatility and uncertainty about global growth, the U.S. labor market passed with high marks, notching its 100th straight month of increased employment and sustaining robust wage growth.

Nonfarm payrolls increased a seasonally adjusted 304,000 in January, the Labor Department said Friday. The gain was well above last year’s average monthly job growth—showing most private-sector businesses shrugged off the shutdown and kept on hiring. Meanwhile, wages rose at better than a 3% rate from a year earlier for the sixth straight month, revised figures showed, extending the best pay improvements since the recession ended in 2009.

The unemployment rate rose to 4.0% last month from 3.9% in December. The Labor Department said the shutdown caused thousands of federal workers to be counted as on temporary layoff, contributing to the uptick. The rate has edged up the past two months since touching a 49-year low of 3.7% last fall.

Economists surveyed by The Wall Street Journal had expected 170,000 new jobs in January and a 3.9% unemployment rate.

Century Mark

Job growth continued in January, with nonfarm payrolls adding the most jobs in a month since last February.

“Payrolls crushed expectations,” Omair Sharif, economist at Société Générale, wrote in a note to clients. “Not bad for an economy that is supposedly softening.”

Revised figures show employers added 222,000 jobs in December and 196,000 jobs in November, a net downward revision of 70,000.

While more than 300,000 federal workers were furloughed, meaning not reporting to work during much of January, they didn’t impact the count in the payroll survey because they received back pay. Federal employment increased by 1,000 during the month.

But since those workers didn’t report to work at all during the survey week, the week that includes the 12th of the month, many were counted as unemployed due to temporary layoff, in a separate survey of households that determines the unemployment rate. That caused the jobless rate to rise to the highest level since June 2018.

Federal workers who worked without receiving their paychecks as scheduled were counted as employed in both surveys.

Outside of the government, private-sector payrolls rose by 296,000. That is well above average gain in recent years, suggesting businesses largely shrugged off any impact from the 35-day shutdown ended Jan. 25. The Labor Department remained open because it was among the agencies funded by Congress earlier in 2018.

Hiring last month increased in nearly every major category. The leisure and hospitality sector, including restaurants, added 74,000 employees. Construction firms hired 52,000. The manufacturing, health-care and retail sectors also added jobs. Employment declined slightly in the information sector. Local and state governments added 7,000 jobs.

The labor market has been a pillar of stability during the economic expansion, with employers adding jobs every month since October 2010. The streak is more than twice as long as the next longest such stretch on record, the 48 months concluding in June 1990.

During much of those 100 months wage growth was weak, but gains improved in the second half of last year. In January, average hourly earnings for all private-sector workers increased 3 cents to $27.56 an hour. Hourly wages rose by 10 cents in December. The average workweek in January was unchanged at 34.5 hours.

The labor market’s relative strength stands in contrast to signs the economy may be cooling.

The Federal Reserve indicated Wednesday that it was done raising interest rates for now, after lifting its benchmark rate four times last year.

Fed Chairman Jerome Powell, in a news conference Wednesday, raised concerns about slowing growth in major foreign economies, particularly China and Europe, and about the elevated uncertainty due to Brexit, ongoing trade negotiations and the effects from the government shutdown.

“Like many forecasters, we still see sustained expansion of economic activity, strong labor-market conditions, and inflation near 2% as the likeliest case,” he said. “But the crosscurrents I mentioned suggest the risk of a less-favorable outlook.”

Some major U.S. companies, including Apple Inc. and Caterpillar Inc., recently reported disappointing profits. But other firms, including Facebook Inc. and Amazon.com Inc.,posted record profits. Those gains alongside strong results from banks and smaller companies helped propel the best January gain for stocks in 30 years.

Friday’s jobs report included benchmark revisions, which incorporate payroll data from tax records. The total nonfarm employment level for March 2018, the benchmark month, was revised down by 1,000 to 148.28 million. But for all of last year, employers added 2.674 million jobs, and upward revision from 2.638 million. Monthly seasonally adjusted data was revised back to January 2014.

The report also showed a broader measure of unemployment, including those too discouraged to look for work, plus Americans stuck in part-time jobs but who want to work full-time, rose to 8.1% in January from 7.6% the prior month. The rate, known as the U-6, was the highest since February 2018. The rate remains elevated compared with last time the headline unemployment rate stayed near 4%, suggesting there may still be some slack in corners of the labor market.

While unemployment is near a historic low, the labor-force participation rate is still only modestly above multidecade lows touched in 2015. Friday’s report showed the share of American adults working or looking for work rose to 63.2%, up a half percentage point from a year earlier.

With just a small share of Americans out of work but seeking jobs, and the labor force growing only slowly, some employers have had difficulty filling job openings. Separate Labor Department data show the number of job openings exceeds the number of unemployed Americans. Prior to last year, that had not occurred in nearly two decades of records.