FXTRADING Financial Focus (Asia-Pacific 02/06)US jobless claims rise but trend intact

US initial jobless claims posted a noticeable increase last week, exceeding prior market expectations. However, viewed over a longer horizon, this move has not undermined the broader assessment that the labor market remains broadly stable. The short-term jump looks more like the release of temporary disruptions rather than a signal of a structural or trend-level turning point.

According to data released by the US Department of Labor, initial jobless claims rose by 22,000 week on week to a seasonally adjusted 231,000 in the week ending January 31, marking the largest single-week increase in nearly two months. By comparison, market expectations had been closer to 210,000. On the surface, the headline number appears strong, but it does not fully reflect underlying changes in firms hiring behavior.

From a structural perspective, weather effects played a significant role. Toward the end of January, large parts of the US experienced widespread snowfall and extreme cold, forcing temporary shutdowns across a range of industries and leaving some workers briefly unemployed. In the unadjusted data, applications rose sharply in states such as Pennsylvania, New York, and New Jersey, with similar increases across several Midwestern states. These regions were among those most heavily affected by adverse weather conditions at the time.

At the same time, the turn of the year is inherently one of the most volatile periods for jobless claims data. Employment arrangements shift frequently around the holiday season, and seasonal adjustment models tend to be less reliable during this window, often amplifying short-term fluctuations. After the volatility seen at the end of 2025, the recent uptick in claims can therefore also be interpreted as a process of normalization.

Looking at smoother indicators, there is little evidence of a meaningful deterioration in labor market conditions. The four-week moving average of initial claims edged up only slightly to around 212,000, still within a historically low range. Continuing claims rose modestly in the prior week, but the overall trend remains stable, and week-to-week movements have been heavily influenced by seasonal adjustment factors.

Signals from the layoff side also need to be assessed carefully. Data from a global outplacement firm show that US companies announced a sharp increase in planned layoffs in January, concentrated mainly in logistics and e-commerce, with UPS and Amazon accounting for a large share. However, similar layoff announcements over the past year have not translated into a sustained rise in jobless claims, suggesting they reflect corporate restructuring rather than a broad-based economic slowdown.

From FXTRADING‘s perspective, the data reinforce the market’s view of a US labor market characterized by low hiring and low firing dynamics, providing a practical basis for the Federal Reserve to keep policy rates unchanged through the first half of the year. In the near term, fluctuations in jobless claims are more likely to influence risk sentiment and bond yield movements than to alter the overall monetary policy path. As long as upcoming nonfarm payrolls and the unemployment rate remain within moderate ranges, US dollar assets are likely to continue drawing support from stable interest rate expectations.