Unemployment claims surge and federal shutdown is partly to blame

Partially due to the government shutdown, about 374,000 people filed first-time unemployment claims last week, the largest one-week increase since Superstorm Sandy.

About 66,000 more people filed for unemployment benefits last week compared to the week before the Department of Labor said. In the week following Superstorm Sandy, unemployment claims rose by 88,000.

First-time unemployment claims are usually a good indication of how the economy is doing because they closely correlate with layoffs. But a number of factors, including the shutdown, have skewed the numbers in recent weeks.

For example, half the new claims last week came from California because the state has been struggling to keep up with claims due to an upgrade of its computer system. An error delayed unemployment checks for many people in the state and caused the number of claims to jump.

That doesn’t mean the U.S. shutdown is blameless in the matter. It’s been estimated that about 15,000 of the new claims came from private sector workers who rely on business from the federal government.

The numbers don’t include the nearly 500,000 federal workers who are eligible to file for unemployment benefits. The statistics about those workers are kept in a separate category by the Labor Department.

"The broader picture is still that labor market conditions are improving, albeit not quite as much as we previously thought," said the chief U.S. economist for Capital Economics, Paul Ashworth.

About 11 million people remain unemployed in the United States.