Applications for U.S. unemployment benefits rose to the highest level since February during the week that followed Easter and spring recess at New York City public schools.
Initial claims increased by 18,000, to 241,000, in the week that ended April 26, according to Labor Department data released Thursday. The median forecast in a Bloomberg survey of economists called for 223,000 applications.
Before adjusting for seasonal factors, initial claims increased by about 12,900 last week. Applications in New York alone rose by more than 15,500. Some school workers in New York City, such as bus drivers and janitors, are allowed to apply for benefits during winter and spring breaks. This could account for the large gain in the state’s unemployment claims.
“Every time that New York City schools have a week-long vacation, the tally of initial claims in NY spikes for one week” by about 15,000, Stephen Stanley, chief economist at Santander U.S. Capital Markets, said in a note. He added, “the takeaway is that I am not going to worry about the prospect of an uptrend in layoffs until I see next week’s reading.”
New applications tend to be choppy from week to week, especially around holidays and breaks. Up until now, claims had remained subdued in the face of uncertainty about the economic outlook. Any sustained increase in claims would suggest a weakening in what is currently seen as a resilient job market.
Continuing claims, a proxy for the number of people receiving benefits, rose to 1.92 million in the week ended April 19, the highest since 2021 and a sign that it is taking longer for out-of-work people to find a job. The figure exceeded all estimates.
The four-week moving average of new applications, a metric that helps smooth out fluctuations from week-to-week, rose to 226,000.
The number of job cuts announced by U.S.-based employers dropped to about 105,400 in April as plans to shed federal workers subsided, outplacement firm Challenger, Gray & Christmas said in a report. After some 280,000 firings linked to the actions of the Department of Government Efficiency were announced in March, last month’s tally included only about DOGE-related 2,700 job-cut plans.
“Though the government cuts are front and center, we saw job cuts across sectors last month,” Andrew Challenger, senior vice president at the firm, said in the report. “Generally, companies are citing the economy and new technology.”
Challenger tracks announced layoffs, and it remains unclear how many of them will ultimately result in actual job losses.
Applications filed by out-of-work federal employees aren’t included in total jobless claims. Data from the previous week showed claims are hovering near levels seen in January, before the Trump administration started firing workers across agencies. The figures for Fed employees will be updated later on Thursday.
In ADP Research data published Wednesday, hiring by U.S. firms moderated to the slowest pace in nine months, and some services sectors included education and information shed workers. The monthly employment report due Friday will provide fuller insight into the health of the labor market. Economists anticipate a slowdown in payroll growth, while the unemployment rate is seen holding at 4.2%.
