The number of Americans filing new applications for unemployment benefits rose more than expected last week, highlighting short-term disruptions from severe winter weather even as the broader labour market continues to show signs of resilience.
Initial claims for state unemployment benefits increased by 22,000 to a seasonally adjusted 231,000 in the week ended January 31, according to data released by the Labor Department on Thursday.
The figure exceeded economists’ expectations of 212,000, underscoring the impact of snowstorms and freezing temperatures that swept across large parts of the country toward the end of January.
Economists noted that extreme weather conditions often trigger temporary layoffs and delays in hiring, which can distort weekly claims data.
Despite the spike, applications for unemployment benefits remain at levels consistent with a labour market that is cooling only gradually rather than weakening sharply.
Volatility masks underlying stability
Beyond weather-related disruptions, analysts said the turn-of-year volatility is also influencing the data.
Seasonal adjustments, shifting holiday schedules and administrative factors often produce fluctuations in claims figures during this period, making it difficult to draw firm conclusions from a single week’s reading.
Through these distortions, the US labour market continues to operate in what economists describe as a “low hire, low fire” environment.
While some high-profile companies such as United Parcel Service and Amazon have recently announced layoffs, overall job losses remain contained and hiring has slowed rather than collapsed.
Uncertainty around trade policy and technological change is also weighing on corporate decision-making.
Economists argue that concerns over import tariffs and the rapid adoption of artificial intelligence have made companies more cautious about expanding their workforce, as businesses reassess staffing needs while redirecting resources toward automation and digital investments.
Broader indicators show mixed signals
Other measures in the claims report pointed to a modest deterioration in labour market momentum.
The four-week moving average of jobless claims, which smooths weekly volatility, rose by 6,000 to 212,250, suggesting a gradual upward trend in layoffs.
Continuing claims, which track the number of people receiving unemployment benefits after their initial week and are often viewed as a proxy for hiring conditions, increased by 25,000 to 1.844 million in the week ended January 24.
The rise indicates that some unemployed workers are taking longer to find new jobs, a sign that labour demand may be easing.
However, the claims data will not influence January’s official employment report, which is due next Wednesday after being delayed by a recent three-day federal government shutdown.
Economists currently expect nonfarm payrolls to rise by around 70,000 jobs, following a gain of 50,000 in December, while the unemployment rate is forecast to remain steady at 4.4%.
Layoffs in January highest since 2009: Challenger, Gray & Christmas
In other news, a separate report from Challenger, Gray & Christmas showed that layoff announcements surged in January to 108,435, more than double the number recorded a year earlier.
The figure marked the highest January total since 2009, during the depths of the global financial crisis.
At the same time, companies’ hiring plans dropped to 5,306, the lowest January level since the firm began tracking the data in 2009.
According to Challenger, the scale of job cuts suggests that many restructuring decisions were made late last year, reflecting a more pessimistic outlook for 2026.
Despite these warning signs, economists argue that the overall stability of the labour market could encourage the Federal Reserve to maintain its current policy stance.
The US central bank last week left interest rates unchanged in the 3.50%–3.75% range, and analysts expect policymakers to remain cautious in the first half of the year as they weigh slowing job growth against persistent economic uncertainties.
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