Weekly jobless claims jumped by 66,000 last week to a six-month high in the first warning that damage from the government shutdown is starting to affect the economy.
While half the increase came from a backlog in claims in California, another 15,000 reflected the furlough of nonfederal workers from employers losing government business due to the shutdown, which is now in its second week.
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The sharp rise comes after the average fell to a 6½-year low the week before.
“The economic costs of a shutdown are going to increase the longer the shutdown occurs,” Ryan Sweet, a senior economist at Moody’s Analytics Inc., told Bloomberg. “If this drags along for the next couple of weeks, the economic toll will be even more significant.”
About 374,000 people filed for their first week of unemployment benefits last week, the Labor Department said Thursday, compared to 308,000 the week before.
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It was the largest one-week rise since November 2012 in the wake of Superstorm Sandy.
Nearly 500,000 federal workers remain temporarily laid off due to the shutdown. They may also file for benefits, but they'll be asked to repay the money later if Congress grants them retroactive pay.
Figures including those numbers won't be published until next week.