Jobless Claims Hit 6-Month High Amid Government Shutdown

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FORT WASHINGTON, MD – SEPTEMBER 17: Thousands of applicants attend a job fair hosted by Tanger Outlets for its November opening on Tuesday, September 17, 2013, in Fort Washington, MD. The center at National Harbor will bring 900 jobs to Prince George’s County. Event organizers said the job fair attracted roughly 1,000 applicants per hour and they are expecting to receive about 6-7,000 applicants by day’s end. (Photo by Jahi Chikwendiu/The Washington Post via Getty Images) | Getty

While we’re all focused on whether or not Congress will raise the debt ceiling in time to avoid a nightmarish government default, the government shutdown is already here and doing real damage.

The Labor Department on Thursday said new weekly claims for unemployment benefits jumped by 66,000 to 374,000 last week, the highest in six months. At least 15,000 of this surge in jobless claims was due to private-sector workers being laid off temporarily due to the government shutdown, the Labor Department said.

The number of shutdown-related claims might actually be higher than 15,000. Labor attributed roughly 33,000 new claims to a computer problem in California. That means there were about 18,000 new claims last week that have no explanation. Some of them are probably due to the shutdown, although they were not identified as such, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“The shutdown clearly is hurting,” Shepherdson said.

Thursday’s claims report also did not include any federal workers furloughed due to the shutdown, other economists noted. Those are reported with a one-week delay, which means we will see even more shutdown impact next week.

House Republicans seem close to agreeing to a short-term increase of the government’s borrowing limit, which will temporarily delay the possibility of government default. But they are apparently not as interested in an immediate end to the government shutdown, now in its second week and costing the economy $160 million per day, according to one estimate. Workers are feeling the brunt, in what was already a sluggish labor market.

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