LIVE MARKETS-Jobless claims: Fire and ice

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JOBLESS CLAIMS: FIRE AND ICE

Last week, 223,000 U.S. workers joined the queue outside the unemployment office USJOB=ECI, according to the Labor Department, marking a 2.8% uptick and landing 3,000 to the north of analyst estimates.

While the increase was largely attributable to California, which has been suffering the effects of catastrophic wildfires, early January blizzards in other parts of the country slightly mitigated those gains.

"(The) boost to overall claims was countered only partially by a fall back in claims in states such as Michigan, where economic activity was disrupted by snowstorms in the week ending January 11," writes Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

While the underlying trend - as expressed by the four-week moving average - now shows a slight upward bias, initial jobless claims have been moving sideways, bound to the 200,000 to 260,000 range for nearly three years.

But Tombs sees a bad omen in the spike in Worker Adjustment Retraining Notifications (WARN), in which companies give advance notice of plant closings and mass layoffs.

"WARN layoff announcements in November and December were 22% above their average in the first 10 months of 2024," he says.

Ongoing claims USJOBN=ECI, reported with a one-week delay, surged 2.5% to 1.899 million, suggesting it's taking longer for out-of-work Americans to land a suitable replacement job.

"The level of continued claims, despite low layoffs, is consistent with other labor market metrics, such as a low pace of hiring, and shows that it is somewhat difficult for those who do lose their jobs to find new work," says Nancy Vanden Houten, lead U.S. economist at Oxford Economics.

(Stephen Culp)

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