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First Cut: Jobless claims unwind some of the shutdown effect in the February 2 week

Initial jobless claims fell 19,000 to 234,000 in the February 2 week, falling sharply from the unrevised 253,000 in the prior week. Claims in the January 26 week were elevated by the knock-on effects of the partial federal government shutdown. The February 2 week level did not fall as much as expected, but that may be in part due to the arrival of extreme cold weather in the upper Midwest and into the Northeast that prevented any kind of outdoor work. The worst of that has lifted, and claims levels should continue to decline into the coming week.

No states estimated claims in the February 2 week and the Labor Department did not cite any special factors.

Continuing claims fell 42,000 in the January 26 week at 1.736 million people. It appears that some of the seasonal retail and transportation workers laid off earlier in the month have already found new jobs. The insured rate of unemployment held steady at 1.2% for a tenth straight week (unrounded 1.124% compared to 1.243% in the January 19 week).

So far it seems that the negative impacts from the 35-day government shutdown will be brief, but another closure so soon after the first could lead to a swifter response on the part of government contractors and businesses dependent on federal lands, and further difficult financial conditions for workers who will have had little time to rebound from the last one.

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