Jobless Claims Dip Slightly as Worker Unease Grows

• The 4-week moving average for jobless claims increased to 206,250, up 2,250 from the previous week's revised average, with data potentially affected by Martin Luther King Jr. Day and severe winter storms
• Labor Economy workers' personal job security sentiment dropped 6.7 points in November to 75.2 on a 100-point scale, marking the most negatively impacted dimension in consumer sentiment
• Growing uncertainty about steady hours and pay is causing workers to delay purchases, trade down to cheaper options, and reduce discretionary spending even before actual job losses occur

Summary: Jobless Claims Dip Slightly as Worker Unease Grows

Key Figures:

Initial unemployment claims fell to 209,000 for the week ending January 24, 2026, down 1,000 from the previous week. The 4-week moving average increased to 206,250, up 2,250 from the prior week. The previous week's figures were revised upward by 10,000, from 200,000 to 210,000.

Market Context:

While jobless claims remain low, indicating limited seasonal hiring and firing activity, the data was affected by Martin Luther King Jr. Day and severe winter storms. However, economist Eliza Winger notes that the "surface calm" of the labor market masks deeper instability.

Labor Economy Impact:

The Labor Economy—approximately 60 million U.S. workers earning under $25/hour—represents 15% of total consumer spending. In November, job security sentiment among these workers plummeted 6.7 points to 75.2 on a 100-point scale, the largest monthly decline across all sentiment dimensions.

Consumer Spending Implications:

Growing uncertainty about steady hours and pay is driving cautionary behavior among hourly workers, even absent actual layoffs. This translates to delayed purchases, downtrading to cheaper alternatives, and reduced discretionary spending in sectors like dining, retail, transportation, and personal services.

Key Insight:

Future earnings perceptions weigh more heavily on spending decisions than current income for Labor Economy workers, whose fluctuating hours and schedules can change with little notice. This sentiment shift poses risks to consumer demand and local commerce, particularly in service sectors heavily dependent on discretionary spending.

Bottom Line:

Despite stable headline unemployment numbers, deteriorating worker confidence signals potential headwinds for consumer-facing businesses.