Last week saw a modest decline in the number of Americans filing for unemployment benefits, with figures staying consistent with recent years’ trends. According to the Labor Department, jobless claims decreased by 6,000, reaching 219,000 for the week ending March 29. This comes in below the analysts’ predictions of 226,000 new claims.
Jobless benefit applications serve as an indicator of layoffs, and in recent years, these figures have fluctuated between 200,000 and 250,000. Despite the stability, there are potential challenges ahead. Economists are expressing concern over a possible global economic slowdown following the Trump administration’s recent announcement of widespread tariff increases, which could potentially destabilize the labor market that has shown remarkable resilience.
In line with his tariff initiatives, President Trump’s commitment to significantly reduce the federal workforce is currently underway. While the specific timing for the appearance of these job cuts in the layoffs data isn’t clear, economists suggest they may soon be visible in the Labor Department’s March jobs report, scheduled for release on Friday.
The federal government saw a reduction of 10,000 jobs in February, the steepest decline since June 2022. Recently, some employees at the Food and Drug Administration were advised to prepare for potential layoffs, as indicated by an internal email. Broader dismissals are anticipated to trim 20,000 positions at the Department of Health and Human Services, with 10,000 of these through direct layoffs and the remainder through early retirement and voluntary separation offers.
Additional federal departments, including the IRS, Small Business Administration, Veterans Affairs, and Department of Education, are either announcing or planning workforce reductions. These efforts form part of the Trump administration’s strategy, known as the Department of Government Efficiency, or “DOGE,” overseen by billionaire Elon Musk, aimed at downsizing the federal workforce.
While the labor market has shown some signs of weakening over the past year, it remains robust with a healthy supply of opportunities and relatively low layoffs. The government reported a solid increase of 151,000 jobs in February, maintaining the unemployment rate at an acceptable 4.1%. Analysts project that March’s nonfarm payrolls will rise by 130,000, with the unemployment rate edging up slightly to 4.2%.
Several prominent companies, such as Workday, Dow, CNN, Starbucks, Southwest Airlines, and Facebook’s parent company, Meta, have already announced job cuts this year. The four-week moving average of jobless claims, which helps even out weekly volatility, dropped by 1,250 to 223,000.
The total number of Americans receiving unemployment aid in the week ending March 22 increased by 56,000 to 1.9 million, marking the highest level since November 2021.