By Lucía Mutikani
WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits rose last week, economists estimated on Thursday, and more people were collecting unemployment checks in early October amid improving labor market conditions.
Initial claims for state unemployment benefits rose to a seasonally adjusted 232,000 for the week ending Oct. 18 from 220,000 the previous week, economists at Citigroup and Nationwide estimated. Goldman Sachs estimated claims at 227,000, while JPMorgan put the figure at 229,000.
Claims data was not available for Tennessee, Massachusetts and Colorado. But economists made assumptions for the three states, similar to what the Labor Department would normally make when data is not available.
States continue to compile claims numbers and submit them to the Department of Labor despite the US government shutdown that has caused a blackout of economic data.
Economists have taken the unadjusted data to make estimates using seasonal adjustment factors that the government released earlier this year, providing insight into the labor market.
Before the shutdown, now in its third week, signs of labor market weakness were increasing, driven primarily by lackluster hiring that economists have attributed to the Trump administration’s trade policy. Estimated claims have remained within their pre-lockdown range, suggesting there has not been a major increase in layoffs.
“The latest state-level jobless claims data suggests the labor market remains stable and layoffs remain low,” said Oren Klachkin, financial markets economist at Nationwide. “Overall, initial claims remain moderate and do not indicate an imminent economic downturn.”
CLAIMS BY FEDERAL WORKERS HAVE INCREASED
But there has been an increase in federal employee claims in recent weeks, likely related to the more than 150,000 workers who left the payrolls in late September after accepting buyouts.
Furloughed federal employees can apply for unemployment benefits, but would have to repay the program when they receive their back pay. Federal worker claims are reported under a different program. The latest data on the program was not immediately available.
The regular claims data covered the period during which the government would have surveyed employers for the nonfarm payrolls component of the October employment report.
Economists did not consider the shutdown to have a negative impact on the quality of the October payroll count.
However, they believed that the delay could improve the response rate to the survey. The low response rate has been attributed to major revisions to payroll data.
The Federal Reserve is expected to cut interest rates again next week to help the labor market.
The number of people receiving unemployment benefits after an initial week of aid, an indicator of hiring, rose to a seasonally adjusted 1.942 million during the week ended Oct. 11 from 1.928 million, Citigroup estimated. Estimates for these so-called continuing claims from Goldman Sachs, JPMorgan and Nationwide were within that range.
Elevated readings for continuing applications suggest that the unemployed are experiencing difficulty obtaining new positions. The unemployment rate rose to a near four-year high of 4.3% in August.
“This likely reflects the low hiring environment, as normally hiring would pick up in October for the holiday season,” said Gisela Young, an economist at Citigroup. “Some indications suggest that holiday hiring may be lower than usual this year.”
(Reporting by Lucía Mutikani;)