WASHINGTON – The number of people applying for U.S. unemployment benefits jumped by 66,000 last week to a seasonally adjusted 374,000. But the spike was largely because California processed a huge backlog of claims and the partial government shutdown prompted some companies to cut jobs.
The Labor Department said Thursday that the less-volatile four-week average rose 20,000 to 325,000. The sharp increase in both the weekly figures and the four-week average comes after applications hovered near a six-year low the previous week.
A government spokesman said that about half the weekly increase occurred in California, where officials processed applications that were delayed several weeks by a computer upgrade. One-quarter of the increase reflected applications from employees at government contractors and other workers affected by the shutdown.
Applications are a proxy for layoffs. Before last week, they had declined steadily over the past three months. That’s a sign companies are cutting fewer workers.
“The broader picture is still that labor market conditions are improving, albeit not quite as much as we previously thought,” said Paul Ashworth, an economist at Capital Economics.
Federal workers temporarily laid off may also file for benefits. But their numbers are reported separately and published a week later than the other applications.
Falling applications are typically followed by more hiring. But there aren’t any signs that has happened yet. Instead, job gains have slowed in recent months.
It’s not clear if hiring trends changed last month. The government was unable to issue the September employment report because of the shutdown.