U.S. Jobless Claims Decline Falls Short of Market Expectations
Initial state unemployment benefit claims decreased by 5,000 to a seasonally adjusted level of 227,000 for the week.
Quick overview
- U.S. unemployment benefit claims fell by 5,000 to 227,000, which was higher than economists' expectations of 222,000.
- The modest decline in claims is attributed to disruptions from severe winter storms and seasonal volatility.
- Despite a drop in unemployment and job growth in January, the labor market is characterized by low hiring and low firing.
- Continuing claims rose by 21,000 to 1.862 million, but fewer individuals experienced prolonged unemployment in January.
U.S. unemployment benefit claims fell less than the market had expected last week. Specialists warn that the modest decline was likely linked to the continued disruptions caused by severe winter storms.
Initial state unemployment benefit claims decreased by 5,000 to a seasonally adjusted level of 227,000 for the week ending February 7, the U.S. Department of Labor reported on Thursday. Economists surveyed by Reuters had forecast 222,000 claims.
The decline reversed only a small portion of the previous week’s increase, which had been attributed to snowstorms and freezing temperatures across much of the country, as well as to normalization after seasonal volatility at the end of last year and the beginning of 2026.
Despite the drop in unemployment, economists point to weak hiring levels
Although job growth accelerated in January and the unemployment rate fell to 4.3% from 4.4% in December, economists continued to characterize the labor market as one in a state of “low hiring and low firing.” Nearly all of the jobs created in January came from the healthcare and social assistance sectors.
Economists argue that trade and immigration policies have been constraining the labor market, but they remain optimistic that job growth will strengthen later this year, in part due to tax cuts.
The number of people receiving unemployment benefits after an initial week of assistance — a key indicator of hiring conditions — rose by 21,000 to 1.862 million on a seasonally adjusted basis for the week ending January 31, according to the claims report. So-called continuing claims have also been affected by seasonal volatility.
Even so, fewer people experienced prolonged periods of unemployment in January. The average duration of unemployment remained close to the levels recorded four years ago.
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