US jobless claims rise amid storms, but the labour market remains steady

WASHINGTON (Feb 5, 2026) — New data from the US Department of Labor shows that weekly applications for unemployment benefits rose more than expected at the end of January, as severe winter weather disrupted work across several states. Even so, economists say the bigger picture still points to a labour market that is cooling only slowly—more “low hire, low fire” than outright weakening.

What the latest jobless claims numbers show

The headline figure is the number of people filing initial claims for unemployment benefits. For the week ending January 31, 2026, initial claims rose to 231,000, up 22,000 from the prior week’s 209,000. Economists surveyed by Reuters had expected a lower number (around 212,000), so the jump surprised markets.

Because weekly data can swing around from noise—weather, holidays, reporting delays—many analysts prefer the four-week moving average, which smooths out volatility. That average increased by 6,000 to 212,250. In plain terms: claims are higher than a few weeks ago, but not at levels that typically scream recession.

Continuing claims: a closer look at how quickly people are finding jobs

Another important measure is continuing claims—the number of people who have already filed and are still receiving benefits. For the week ending January 24, continuing claims rose by 25,000 to 1.844 million. Analysts often use this as a rough proxy for how easy (or hard) it is to get re-hired. A rise can suggest that some job seekers are taking longer to land a new role.

Still, continuing claims had fallen for three straight weeks before this increase, and economists noted that early-year data can be distorted by seasonal adjustments. Also, benefits typically run out after 26 weeks in most states, which can affect the continuing-claims count over time.

Why winter storms likely pushed claims higher

According to Reuters’ reporting on the release, the late-January rise likely reflects a mix of snowstorms and freezing temperatures across large portions of the US, plus a “normalization” after unusual seasonal volatility around the holidays and the turn of the year. When businesses close or reduce hours due to weather, some workers may be laid off temporarily, and paperwork can pile up in ways that shift claims between weeks.

The Reuters report pointed to notable increases in unadjusted claims in several states, including Pennsylvania, New York, and New Jersey, along with other states such as Illinois, Missouri, Ohio, and Wisconsin. These kinds of geographic patterns fit the storm-disruption story: when a weather system hits many states at once, the weekly claims report can “pop” even if the underlying job market has not fundamentally changed.

“Low hire, low fire”: what that means in real life

Economists describing today’s labour market often use the phrase “low hire, low fire”. It’s a simple idea:

• Low fire: companies are not doing mass layoffs, and jobless claims remain relatively contained.
• Low hire: companies are also not hiring aggressively, so people who lose a job may take longer to find the next one.

Reuters quoted an economist saying there is “no sign” of the kind of layoffs typically seen in the early stages of a recession, emphasizing that the overall level of claims is still low compared with historical downturn periods. That’s why one “stormy” week doesn’t automatically mean the economy is heading downhill.

At the same time, when the moving average starts drifting upward—even gradually—analysts watch closely for confirmation in other data (like payroll growth, job openings, and wage trends). The moving average rising to 212,250 suggests the labour market may be slowly loosening, but it remains far from a collapse.

Planned layoffs surged in January, but claims didn’t explode—why?

One reason this report drew attention is that another dataset showed a large jump in layoff announcements. Reuters reported that Challenger, Gray & Christmas data indicated announced layoffs by US employers rose sharply in January to 108,435 (a large percentage increase). Much of that increase was tied to a few major companies—especially UPS and Amazon.

So why didn’t unemployment claims surge even more? There are a few common explanations economists consider:

1. Timing gaps: layoff announcements often come before workers file for benefits.
2. Severance packages: some workers receive pay for weeks or months, delaying claims filings.
3. Quick re-hiring: in some cases, laid-off workers find new jobs fast, especially if their skills are in demand.
4. Eligibility rules: not everyone qualifies for benefits, depending on work history and state rules.

Reuters also noted that high-profile layoffs in prior periods did not always lead to large, immediate spikes in claims—another reminder that jobless claims capture a specific administrative process, not every job change happening in the economy.

How markets reacted

Financial markets pay attention to jobless claims because the labour market affects consumer spending, inflation pressure, and Federal Reserve decisions. Reuters reported that after the claims data:

• US stocks opened lower,
• the dollar was steady, and
• Treasury yields fell.

These reactions fit a common pattern: if investors believe the labour market is cooling (even slightly), they may expect less pressure for higher interest rates, which can move bond yields lower.

What this could mean for the Federal Reserve

The Fed’s job is to balance inflation control with maximum employment. When layoffs are low, the economy can keep spending and growing—but inflation can also stay sticky. When the labour market cools, inflation may ease, but the risk of recession rises if cooling turns into widespread job losses.

In this report, Reuters said economists expected the unemployment rate to hold steady around 4.4%, and suggested that labour market stability could encourage the Fed to keep rates unchanged through the first half of the year. Reuters also reported the Fed’s benchmark rate range as 3.50%–3.75% at the time.

In other words: one storm-boosted jump in claims is not likely to force a policy pivot by itself. But if claims trends move higher for several weeks—and if other labour indicators weaken at the same time—the conversation could change.

Why this matters to workers and families

It’s easy to treat jobless claims as just a chart, but it connects to real life. When claims rise, it can signal:

• More people are facing job disruption—temporary or permanent.
• Some households may cut spending, which can ripple into local businesses.
• Job seekers may face longer searches if hiring stays slow.

At the same time, claims remaining in a “normal” range can be reassuring: it suggests that, overall, employers are still trying to hold onto workers, even while they remain cautious about expanding headcount.

Important context: weekly claims are noisy

Weekly jobless claims are one of the fastest labour-market indicators available, but that speed comes with a downside: volatility. Weather events, holidays, school schedules, and seasonal adjustment challenges can all create sharp weekly moves that reverse quickly.

That’s why analysts usually look for:

• Trends (moving averages) rather than a single week,
• confirmation from continuing claims, payroll growth, and job openings, and
• regional patterns (storms and natural disasters often leave footprints in state-by-state changes).

The Department of Labor’s own release confirms the core numbers—231,000 initial claims and a 212,250 four-week average—supporting the view that the latest move is real, even if the reasons behind it may include temporary factors.

Looking ahead: what to watch next

This report does not stand alone. Here are the next checkpoints many economists watch to judge whether the labour market is merely “cooling” or truly weakening:

1) The next few jobless claims reports

If storms were the main driver, claims might fall back in the following weeks. If claims stay elevated or climb further, it could signal broader softness.

2) The US jobs report

Reuters noted that the claims data falls outside the survey period for January’s employment report and that the report schedule was affected by a recent federal government shutdown. Economists’ estimates cited by Reuters converged around roughly 70,000 new jobs for January after 50,000 in December—figures that imply slower job growth than many people are used to seeing.

3) Hiring momentum versus layoff momentum

Even if layoffs stay low, weak hiring can still make the labour market feel tough—especially for new graduates, career changers, or people re-entering the workforce.

4) Fed messaging

If the Fed starts emphasizing labour market “stabilization” or “cooling” more strongly, investors may adjust expectations for rate cuts or holds.

FAQ: US jobless claims and what they really mean

1) What are “initial jobless claims”?

Initial jobless claims count people who file for unemployment benefits for the first time during a given week. It’s one of the quickest signals of layoffs or job disruption in the economy.

2) Why did jobless claims rise to 231,000 in early February 2026?

Reports tied the increase to severe winter storms and to the data “normalizing” after holiday-season volatility and seasonal adjustment challenges.

3) What is the four-week moving average, and why do people use it?

The four-week moving average smooths out weekly spikes and drops, making it easier to see the underlying trend. In this report, it rose to 212,250.

4) What are “continuing claims”?

Continuing claims measure how many people are still receiving benefits after their first week. It can hint at whether job seekers are finding work quickly or struggling to get re-hired.

5) Does this jump mean a recession is coming?

Not necessarily. Economists quoted by Reuters said there was no sign of recession-style layoffs, and that claims are still within the recent range. One week—especially during storms—can be misleading, so analysts watch the trend over multiple weeks.

6) How does this affect interest rates?

Stronger labour markets can keep inflation pressure higher, which can lead to higher or steady interest rates. A gradually cooling labour market can reduce inflation pressure and may support keeping rates unchanged or cutting later—depending on broader data. Reuters reported economists expected the unemployment rate around 4.4% and suggested stability could keep rates unchanged through the first half of 2026.

Conclusion: storms pushed claims up, but the bigger picture still looks steady

The latest US jobless claims report delivered a clear headline—initial claims jumped to 231,000—but the deeper story is more balanced. Severe winter weather likely played a meaningful role, while moving averages and economist commentary still point to a labour market that is stable overall, though not particularly dynamic. If claims ease in the next few reports, it will strengthen the “temporary storm impact” narrative. If they don’t, attention will shift toward whether slow hiring is turning into broader weakness.

Source notes: This article is a rewritten, expanded report based on publicly available coverage and official data releases, including Reuters reporting and the US Department of Labor weekly claims release.

#USJoblessClaims #LaborMarket #EconomicData #FederalReserve #SlimScan #GrowthStocks #CANSLIM