The number of Americans filing new claims for unemployment benefits rose slightly last week, suggesting the labor market remained solid in March, despite a gloomier outlook amid rising trade tensions and a big cut in government spending.
Initial claims for state unemployment benefits rose by 2,000 to a seasonally adjusted 223,000 for the week ended March 15, the Labor Department said on Thursday. Economists surveyed by Reuters had forecast 224,000 claims for the latest week.
Claims have remained in a range of 203,000-242,000 for the rest of the year, with the overall jobless rate low and hiring slowing.
A separate program for unemployment compensation for federal employees (UCFE), reported with a one-week delay, still showed little impact from President Donald Trump’s administration’s massive layoffs of public workers as part of an unprecedented effort to shrink the size of government.
Labor analysts say the rapid layoffs by the Department of Government Efficiency (DOGE) led by tech billionaire Elon Musk have in some cases been done in a way that makes it difficult for laid-off workers to file for unemployment benefits.
The government acknowledged in a court filing this week that nearly 25,000 newly hired workers were fired. A judge ruled that their dismissals were likely illegal, allowing them to be reinstated, albeit temporarily placed on administrative leave.
Trump’s often volatile tariff campaign has weighed on business sentiment, with economists saying the policy instability makes it harder for companies to plan ahead.
The Federal Reserve on Thursday kept its benchmark overnight interest rate in a range of 4.25%-4.50%, acknowledging the uncertainty plaguing the economy. However, U.S. central bank policymakers said they still expect a half-percentage-point reduction in borrowing costs by the end of the year.
Fed Chairman Jerome Powell told reporters that “conditions in the labor market are generally in balance.”
The claims data covers the period in which the government surveys businesses for the nonfarm payrolls portion of the March jobs report. The economy added 151,000 jobs in February. Next week's data on the number of people receiving benefits after the first week of aid, which is a gauge of the hiring rate, could provide a clearer picture of the health of the labor market in March.
