U.S. Jobless Claims Rise More Than Expected To Nearly Two-Month High

(RTTNews) - A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended January 31st.

The Labor Department said initial jobless claims climbed to 231,000, an increase of 22,000 from the previous week's unrevised level of 209,000. Economists had expected jobless claims to inch up to 212,000.

With the bigger than expected increase, jobless claims reached their highest level since hitting 237,000 in the week ended December 6th.

"Initial jobless claims surprised to the upside in the week ended January 31, but the report warrants careful interpretation, as it covers the aftermath of the severe winter storm that affected much of the U.S." said Bernard Yaros, Lead U.S. Economist at Oxford Economics.

The report said the less volatile four-week moving average also crept up to 212,250, an increase of 6,000 from the previous week's unrevised average of 206,250.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also rose by 25,000 to 1.844 million in the week ended January 24th.

Meanwhile, the four-week moving average of continuing claims fell to 1,850,750, a decrease of 14,750 from the previous week's revised average of 1,865,500.

The decrease dragged the four-week moving average of continuing claims down to its lowest level since hitting 1,845,750 in the week ended October 5, 2024.

"We expect labor market conditions to gradually improve over 2026 thanks to interest-rate relief and the boost to aggregate demand from recently instituted tax cuts," said Yaros.

He added, "The Federal Reserve is aware of the discontinuities that can show up in the labor market data, but nothing in the economic statistics so far has likely changed the central bank's calculus in the near term."

The Labor Department had originally been scheduled to release its more closely watched monthly jobs report on Friday.

However, due to the brief government shutdown that ended earlier this week, the report is now scheduled to be released next Wednesday.

Economists currently expect employment to climb by 68,000 jobs in January after rising by 50,000 jobs in December, while the unemployment rate is expected to hold at 4.4 percent.