Jobless claims swelled dramatically between mid-September and mid-October as a 43-day government shutdown disrupted data collection and employers pulled back on hiring.

The number of Americans receiving unemployment benefits surged between mid-September and mid-October, according to Labor Department data released Tuesday that painted a concerning picture of the nation’s employment landscape. The increase suggested that October’s unemployment rate likely climbed as businesses grew increasingly hesitant to add workers amid economic uncertainty.

The department published continuing claims data only for the weeks ending October 11 and 18, representing the period when the government would have surveyed businesses and households for October’s employment report. A Labor Department spokesperson acknowledged that a technical issue caused the premature posting of incomplete information, promising that the full data series would be corrected and made available by close of business on November 20, 2025.

The gap in weekly claims reporting stemmed from the recently concluded 43-day government shutdown, the longest such closure in American history. No official weekly claims data had been released since late September, leaving economists and market watchers operating with limited visibility into labor market conditions during a critical period.

The numbers behind the unemployment surge

Continuing claims, which track individuals receiving benefits after their initial week of aid and serve as a proxy for hiring activity, rose by 10,000 to reach a seasonally adjusted 1.957 million during the week ending October 18. This represented a significant jump from the 1.916 million level recorded in the week ending September 13.

The substantial increase between the September and October survey periods pointed toward an elevated unemployment rate for October and aligned with broader evidence of sluggish hiring across the economy. Private sector employment data from ADP revealed that employers shed an average of 2,500 jobs weekly during the four weeks ending November 1, reinforcing concerns about labor market softness.

The Bureau of Labor Statistics announced plans to publish the delayed September employment report on Thursday. August’s unemployment rate had hovered near a four year high of 4.3 percent, adding urgency to questions about the economy’s trajectory heading into year end.

One potentially encouraging sign emerged from the data. First time applications for benefits remained unchanged between the September and October payroll survey periods, leading some economists to push back against theories that layoffs accelerated during the government shutdown. Carl Weinberg, chief economist at High Frequency Economics, noted that the data should reassure markets and potentially reduce expectations for a Federal Reserve rate cut in December. Fed officials have already signaled reluctance to lower rates again next month.

Housing market struggles deepen unemployment concerns

Labor market weakness rippled through the housing sector, where builder sentiment remained subdued for a 19th consecutive month in November. The National Association of Home Builders and Wells Fargo Market edged up just one point to 38 this month, barely moving from the previous reading of 37 that economists had expected to see unchanged.

Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, explained that elevated mortgage rates, weak labor conditions and high home prices made a significant uptick in new home sales unlikely in the near term. He suggested that a meaningful housing market turnaround probably would not materialize until mid 2026, when falling mortgage rates might coincide with stronger economic growth and gradual jobs market improvement.

The affordability crisis has evolved into a major political flashpoint. President Donald Trump recently proposed introducing 50 year mortgages to make housing more accessible, though the idea drew criticism from supporters and industry experts who argued it would saddle homeowners with higher interest costs and slower equity building.

Demographic shifts illustrated the severity of the affordability challenge. The National Association of Realtors estimated that the median age of first time buyers now reached 40 years, a stark contrast to the 1980s when typical homebuyers were in their late twenties.

Builder survey data showed that 41 percent of construction companies reported cutting prices in November, the highest share since May 2020. The average price reduction held steady at 6 percent, while 65 percent of builders used incentives to close deals. NAHB Chairman Buddy Hughes observed that despite these efforts, many potential buyers remained hesitant to commit.