The number of new claims for unemployment benefits jumped unexpectedly last week as heavy snow caused layoffs to rise.
In addition, many state agencies in the mid-Atlantic and New England regions that process the claims were closed due to the storms and are now clearing out backlogs, a Labor Department analyst said.
The department said Thursday that first-time claims for unemployment insurance rose by 22,000 to a seasonally adjusted 496,000. Wall Street analysts polled by Thomson Reuters expected a drop to 455,000.
Bad weather can cause job losses in construction and other industries sensitive to weather.
Economists closely watch initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.
The four-week average, which smoothes volatility, rose by 6,000 to 473,750.
The four-week average has jumped by about 30,000 in the past month, raising concerns that job cuts are continuing. Initial claims had fallen sharply over the summer and fall but the improvement has stalled since the year began.
The economy has grown for six months but is not yet spurring new hiring. Many economists point out that the current recovery is weak compared to the aftermath of previous deep recessions.
The Labor Department said earlier this month that while the unemployment rate fell to 9.7 percent from 10 percent, employers still cut 20,000 jobs. The economy has lost 8.4 million jobs since the recession began.
The Federal Reserve said last week that it expects the rate will average between 9.5 percent and 9.7 percent this year.
The number of people continuing to claim unemployment benefits, meanwhile, was essentially unchanged at 4.6 million. Those figures, known as "continuing claims," lag initial claims by a week.
But there are now many more people receiving extended unemployment benefits that aren't included in the continuing claims figures. Congress has provided up to 73 weeks of extra benefits, paid for by the federal government, for jobless workers who have used up the standard 26 weeks of benefits customarily provided by states.
About 5.7 million people received extended benefits in the week ended Feb. 6, the latest data available, down from more than 6 million the previous week. The extended benefit data isn't seasonally adjusted and is volatile from week to week.
Among the states, North Carolina had biggest increase in claims, with 5,897, which it attributed to layoffs in the construction, furniture and mining industries. Pennsylvania and Kentucky also reported large increases. The state data lags initial claims by one week.
California reported the largest drop in claims, with 5,540, which it attributed to fewer layoffs in services. Illinois, New York, Texas and Missouri recorded the next largest decreases.
© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.