Initial unemployment claims posted an unexpected increase last week in a potential trouble sign for the wobbling U.S. economy.
First-time filings for unemployment insurance totaled a seasonally adjusted 241,000 for the week ended April 26, up 18,000 from the prior period and higher than the Dow Jones estimate for 225,000, the Labor Department reported Thursday. This was the highest total since Feb. 22.
Continuing claims, which run a week behind and provide a broader view of layoff trends, rose to 1.92 million, up 83,000 to the highest level since Nov. 13, 2021.
Much of the gain seemed to come from one state — New York, where claims more than doubled to 30,043, according to unadjusted data. The increase may have been due to spring recess in New York public schools, according to Sam Tombs, chief U.S. economist at Pantheon Macroeconomics.
“Nonetheless, the deterioration in the timeliest hiring and firing indicators over the last couple weeks suggests that jobless claims will trend up over coming weeks,” Tombs said in a note.
The District of Columbia, which had seen a sharp increase earlier this year amid President Donald Trump’s efforts to shrink the federal government payroll, saw a modest rise last week.
The report comes amid several trouble signs for the economy, though the labor market has remained stable.
In a release Wednesday, the Commerce Department said gross domestic product fell at a 0.3% annualized rate in the first quarter, the first contraction in three years. Much of the decline was driven by a surge in imports ahead of Trump’s tariffs announced in early April, though consumer spending cooled and a pullback in government outlays also contributed to the decline.
Despite the rise in the claims, the longer-term trend remains intact. The four-week moving average climbed 5,500 to 226,000, largely in line with recent trends.
The Labor Department on Friday will release its nonfarm payrolls total for April, with economists expecting an increase of 133,000. The Thursday release will not factor into that number as it is beyond the survey week used for the report.
