The first application for unemployment benefits reached this year’s highest level last week, another potential sign of weakness in the labour market.
Jobless claims for the week ending February 22nd increased the seasonally adjusted 242,000, up 22,000 from Dow Jones’ estimates of 22,000, according to a Labor Department report on Thursday.
The level of claims coincided with its highest since early October 2024, coming amid questions about wider economic growth and concerning signs in recent consumer sentiment surveys.
President Donald Trump has taken proactive steps to reduce the federal workforce through Elon Musk’s Government Efficiency Advisory Committee. Previous efforts have led to a number of job cuts of tens of thousands, and it is expected to continue.
In Washington, DC, new bills totaled 2,047, an increase of 2,047, 421 or 26%, according to figures not adjusted for seasonal factors. According to records from the Ministry of Labor, this is the city’s largest number since March 25, 2023, coinciding with the surge that began in early January.
However, the trend in claims does not appear to be spreading in the surrounding area. Both Virginia and Maryland saw a small decline in the week. California, which has a large federal workforce population, also saw a decline.
“The report showed healthy profits, but not the first ripple that is likely to be a major wave of unemployment rates, both from federal workforce and layoffs such as Starbucks and the Southwest.”
Continued bills running one week late showed a slight decline, to 1.86 million. However, the four-week moving average, which helps smooth out weekly volatility, rose sharply to 224,000, an increase of 8,500.
There was a noticeable increase in the New England region.
In Massachusetts, a total of 9,179 cases increased by 3,731 from a week ago, bringing bills in Rhode Island to more than 2,964.
Other economic news on Thursday showed that orders for long-term goods such as aircraft, electrical appliances and computers unexpectedly jumped 3.1% in January.
The Census Bureau reported that the so-called durable goods increase was revised from previous estimates of a 2.2% decline, following a 1.8% decline in December. Dow Jones’ forecasts increased by 2%.
However, with the exception of the 9.8% increase in shipping, the orders were essentially flat. With the defence excluded, orders rose 3.5%.
Trump announced on social media on Thursday that 25% of his duties in Mexico and Canada will come into effect Tuesday, with China facing an additional 10% charge.
The Commerce Department also said that the US economy grew at an annual pace of 2.3% in the fourth quarter of 2024, growing with a second estimate of gross domestic product, which remains unchanged from the first figures.
The price index in the report that the Federal Reserve will follow shows a slightly higher revision from previous estimates. The quarterly personal consumption expenditure price index showed an increase of 2.4%, or 2.7% at a core of 2.7% when food and energy were excluded.