The bottom line? Jobless claims still stable, but likely to surge in the near term
- The number of first-time claimants for unemployment rose last week but remains well within the narrow range that’s held relatively firm since October.
- For all the attention in the past few weeks concerning the Trump administration’s Department of Government Efficiency program and reported layoffs, there’s little indication thus far of a surge in unemployment claims as a result.
- About 600 laid-off former federal workers filed for unemployment last week, which didn’t materially impact total claims on a national scale. That number will undoubtedly surge in the coming weeks as layoffs already announced become reality. Continuing claims from former federal workers declined last week.
- Aside from federal job cuts, most data suggests that the labor economy remains relatively stable, with private sector employers still hiring at a decent clip.
- Looking ahead, the composition of claims data will come into greater focus. A surge in former federal employees is expected. Surging layoffs would typically raise alarms, reflecting a broader slowdown in the economy, but not to the same degree in this case.
- Even so, it will have a ripple effect that will come into greater focus as the location of those workers becomes clearer.
By the numbers: Modest increase last week has the potential to accelerate
- Initial jobless claims rose by 5,000 to 219,000 for the week ended February 15.
- For the week ended February 8, continuing claims also increased to 1.869 million on a seasonally adjusted basis, up 24,000 from 1.845 million.
- Much attention has been given in recent weeks to the announcement of layoffs across various federal agencies as part of the Trump administration’s goal of shrinking the federal workforce.
- An estimated 200,000 workers have seen their jobs eliminated this year, with the potential for more to come. That’s likely to create a significant wave of unemployment claims in the near term that will be covered by the federal government.
- Federal layoffs notwithstanding, the labor economy broadly remains on a relatively solid footing, with unemployment low and private sector job creation still constructive.
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