WASHINGTON (Reuters) -The number of Americans filing new applications for unemployment benefits increased again last week, JPMorgan estimated on Thursday, hinting at some early layoffs related to the U.S. government shutdown.
Initial claims for state unemployment benefits rose to a seasonally adjusted 235,000 for the week ending October 4 from 224,000 the prior week, JPMorgan calculated. Official economic data collection and publication has been suspended because of the government shutdown, now in its second week.
States have continued to collect unemployment claims data and submit it to Labor Department’s database, which remains accessible. The shutdown following a lapse in funding has delayed the release of the closely watched employment report for September, crucial for decision-making by the Federal Reserve, businesses and households.
“This is the first week that includes the government shutdown, and while these headline figures don’t include federal workers, they have tended to spike in past shutdowns since the economic impact can spill over to non-federal employees,” said Abiel Reinhart, an economist at JPMorgan.
“Claims could increase a bit more next week if the shutdown continues, given the shutdown was only in effect for part of last week.”
Excluding the shutdown noise, claims remained “reasonably low,” Reinhart said. The labor market has been stuck in a “no firing” and “no hiring mode,” with economists saying U.S. trade and immigration policies, and the growing popularity of artificial intelligence have reduced demand and labor supply.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased to a seasonally adjusted 1.927 million during the week ending September 27, from 1.919 million in the prior week, JPMorgan estimated.
(Reporting by Lucia Mutikani; Editing by Richard Chang)
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