For the week ending Jan. 24, initial unemployment claims fell to 209,000, down 1,000 from the previous week, the Labor Department’s Bureau of Labor Statistics said in a Thursday (Jan. 29) press release.
The prior week’s level was revised up by 10,000 from 200,000 to 210,000, while the 4-week moving average was 206,250, up 2,250 from the past week’s revised average. The previous week’s average saw an upward revision of 2,500, from 201,500 to 204,000, according to the release.
The new figures are for the week that began with Martin Luther King Jr. Day and included severe winter storms around the country, both factors that can cause unemployment data to fluctuate, Bloomberg News reported Thursday.
“Jobless claims remain low, signaling muted seasonal hiring and firing,” Bloomberg Economist Eliza Winger said, per the report. “Alongside other high-frequency indicators, the latest print reinforces the picture of solid economic momentum, with little evidence of near-term softening.”
At the same time, the “surface calm” of the job market is concealing a deeper instability, PYMNTS reported Tuesday (Jan. 27). For millions of hourly workers, that uncertainty is shaping their spending habits.
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According to the November edition of PYMNTS Intelligence’s Wage to Wallet Index, a collaboration with Ingo Payments and WorkWhile, small adjustments in wages and confidence among Labor Economy workers are having an outsized impact on consumer demand.
The Labor Economy, made up of roughly 60 million U.S. workers who earn less than $25 an hour, comprises around 15% of total consumer spending. When their hours or compensation fluctuate, local commerce notices it quickly, especially in categories like dining, retail, transportation and personal services.
“Wages only tell part of the story,” PYMNTS reported. “Perceptions of future earnings prospects often weigh more heavily on spending decisions than current income alone. That dynamic is especially pronounced in the Labor Economy, where work hours and schedules can change with little notice.”
In November, Labor Economy workers’ personal job security sentiment dropped 6.7 points in just one month, to 75.2 on a 100-point scale. While broader labor sentiment rose slightly higher, job security was the most negatively impacted dimension in the consumer sentiment model.
“Workers may still be employed, but growing uncertainty about maintaining steady hours or pay encourages caution,” the report said. “The result is delayed purchases, trading down to cheaper options and reduced discretionary spending, even before layoffs or job losses materialize.”
