US initial jobless claims rise to highest level this year
Initial claims increased by 22,000 to 242,000 in the week ended Feb 22, matching the highest level since October
APPLICATIONS for US unemployment benefits rose to the highest this year, amid an increase in job-cuts announcements at corporations and federal agencies.
Initial claims increased by 22,000 to 242,000 in the week ended Feb 22, matching the highest level since October, according to Labor Department data released on Thursday (Feb 27). The median forecast in a Bloomberg survey of economists called for 221,000 applications.
The pickup in new applications coincides with a number of staff-reduction plans at high-profile corporations such as Starbucks, Meta Platforms and Southwest Airlines. Economists have also been on the lookout out for the ripple effects from the firings of workers across federal agencies, including on contractors and other private service firms doing business with the government and particularly in the DC area.
In the Washington, DC, applications rose to the highest level since March 2023, continuing an uptrend that started at the beginning of the year. Claims in Maryland and Virginia, where there is also a high concentration of federal workers, both fell.
Claims filed by fired federal workers are generally not included in the overall initial claims numbers and are reported separately. But the data would include workers who lost their jobs at contractors and other entities that do business with the government or get federal funding.
Overall, demand for workers has moderated, although layoffs at the national level have remained relatively subdued. Continuing claims, a proxy for the number of people receiving benefits, decreased to 1.86 million in the week ended Feb 15.
The four-week moving average of new applications, a metric that helps smooth out fluctuations from week-to-week, increased to 224,000, also the highest this year.
Before adjusting for seasonal factors, initial claims fell last week. California, Kentucky and Tennessee saw the largest declines. Massachusetts and Rhode Island had large gains.
The second estimate of fourth quarter gross domestic product, published on Thursday by the Bureau of Economic Analysis, showed economic growth remained solid at 2.3 per cent on an annualised basis, but a key measure of inflation was revised up from the previous estimate. BLOOMBERG
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