By Lucia Mutikani
WASHINGTON (Reuters) -The number of Americans filing new applications for unemployment benefits increased marginally last week, Haver Analytics estimated on Thursday, pointing to stable labor market conditions in October despite a surge in announced layoffs.
Initial claims for state unemployment benefits rose to a seasonally adjusted 229,140 for the week ended November 1 from 219,520 in the prior week, Haver Analytics calculated. The figure matched estimates from Citigroup, JPMorgan and Nationwide.
The shutdown of the federal government, now the longest on record, has halted the collection, processing and publishing of official economic data.
Claims data was unavailable for New Mexico and assumptions were made in line with what the Labor Department would normally do when data is not available. The claims data could assuage fears stoked by private reports earlier on Thursday showing job losses in October and a surge in announced layoffs amid cost-cutting and adoption of artificial intelligence by businesses.
“The claims data stand in stark contrast to this morning’s sharply negative Challenger job cuts news and show the labor market isn’t falling off a cliff,” said Oren Klachkin, financial market economist at Nationwide. “It’s encouraging to see the labor market remaining stable, albeit soft, in the opening month of the fourth quarter.”
With the government shutdown, the Labor Department’s closely watched employment report will not be published for an unprecedented two straight months on Friday. But states have continued to collect weekly unemployment claims data, submitting it to the Labor Department.
Haver Analytics and Wall Street economists are taking the data and applying seasonal adjustment factors the government published earlier to make the weekly claims estimates.
ECONOMIC UNCERTAINTY IS HURTING THE LABOR MARKET
Economists have cautioned against placing too much emphasis on some of the private-sector surveys, noting the limited scope of coverage and history. A Bank of America Institute analysis of internal deposit data on Thursday suggested “no further deceleration” for now in the pace of job growth that “has taken place since the summer.”
The labor market has slowed considerably from early this year, with economists blaming economic uncertainty, tariffs on imports and AI for the low demand for workers. A sharp reduction in labor supply because of raids on undocumented immigrants is also hurting hiring, most evident in small-business surveys.
A survey from the National Federation of Independent Business on Thursday showed the share of small businesses reporting labor quality as their single most important problem jumped to a four-year high in October.
Stable labor market conditions could allow the Federal Reserve to keep interest rates unchanged next month. The U.S. central bank last week cut its benchmark overnight interest rate by another 25 basis points to the 3.75%-4.00% range, and Fed Chair Jerome Powell said “a further reduction in the policy rate at the December meeting is not a foregone conclusion.”
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased to a seasonally adjusted 1.962 million during the week ending October 25, from 1.955 million, JPMorgan estimated. That was broadly in line with the calculations from Citigroup and Haver Analytics.
“This likely reflects hiring remaining slow and implies downside risk for employment data in October,” said Gisela Young, an economist at Citigroup.
Earlier, the Chicago Fed estimated the unemployment rate climbed to 4.36% in October – a four-year high of 4.4% on the rounded basis typically reported by the Bureau of Labor Statistics – from 4.35% in September.
(Reporting by Lucia Mutikani; Editing by Leslie Adler)
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