Key Points:
- Economists estimate jobless claims rose to around 235,000 last week from 224,000 the previous week.
- The government shutdown has led to early contractor layoffs and delayed official economic data.
- Analysts predict unemployment claims may remain elevated until the government reopens.
Shutdown Pushes Jobless Claims Higher
The number of Americans filing for unemployment benefits rose again last week, signaling early signs of economic strain linked to the ongoing U.S. government shutdown.
Economists from JPMorgan, Goldman Sachs, and Citigroup estimated that initial jobless claims increased to a seasonally adjusted 235,000 for the week ending October 4, up from 224,000 the previous week. Data from Hawaii and Massachusetts were unavailable, so estimates filled the gap.
The shutdown—now entering its second week—has forced the suspension of official economic data collection. While states continue to gather and submit unemployment information to the Labor Department’s database, the absence of national data reporting has complicated assessments of the labor market.
The shutdown has also delayed the September employment report, a key indicator for businesses, households, and the Federal Reserve. According to Citigroup economist Gisela Young, the increase likely stems from government contractors filing for benefits after being temporarily laid off. “Initial claims also rose during the October 2013 shutdown,” Young noted, predicting that numbers could remain elevated or increase further in the coming week.
Hundreds of thousands of federal employees have been sent home, and thousands of private-sector contractors have been affected, intensifying pressure on the labor market.
Other Important Headlines:
Economists Say Claims Still Relatively Stable
Despite the rise, analysts describe the overall level of jobless claims as “reasonably low” given the circumstances. JPMorgan’s Abiel Reinhart commented that once the shutdown ends, any temporary increases in claims should quickly reverse.
The U.S. labor market has recently been marked by a “no firing, no hiring” pattern, influenced by trade uncertainties, immigration policies, and the growing role of artificial intelligence. Minutes from the Federal Reserve’s September meeting revealed concerns that risks to employment had grown, prompting another interest rate cut aimed at stabilizing the job market.
Meanwhile, the number of individuals continuing to receive unemployment benefits—considered a measure of ongoing joblessness—rose slightly to 1.927 million in late September, up from 1.919 million a week earlier, according to JPMorgan. Goldman Sachs estimated a similar figure of 1.924 million.
While the short-term increase reflects the immediate effects of the shutdown, economists emphasize that once federal operations resume, claims are expected to normalize—though broader concerns about sluggish hiring and long-term unemployment remain unresolved.