The number of people filing for unemployment benefits rose last week, hitting the highest level of the year so far. This increase adds to concerns about the health of the job market and signals a potential slowdown in the economy.
Jobless claims for the week ending February 22 were reported at 242,000, marking an increase of 22,000 compared to the previous week. This is also higher than the expected 225,000 claims, based on the Dow Jones estimates. The rise in claims matched the highest level since October 2024, and it comes at a time when broader economic growth is being questioned. Recent surveys on consumer sentiment have also been concerning.
President Donald Trump has been actively working to reduce the size of the federal workforce through his Department of Government Efficiency advisory board, which Elon Musk leads. This effort has already resulted in tens of thousands of job cuts and is expected to continue. The cuts are part of an ongoing trend that could affect economic stability in the long run.
In Washington, D.C., the number of new jobless claims surged to 2,047, an increase of 421 from the previous week. This is a 26% jump, and it represents the highest number of claims for the city since March 2023. This increase aligns with a rise in jobless claims that began in early January, pointing to a potential pattern of economic distress. However, this trend has not spread widely to other areas. For example, Virginia and Maryland saw small declines in claims, while California, which has a significant number of federal government workers, also saw a decrease.
Robert Frick, a corporate economist at Navy Federal Credit Union, pointed out that while the latest report showed a rise in claims, it doesn’t yet suggest a widespread wave of layoffs. He noted that it’s likely we will see a larger increase in unemployment claims soon, especially from layoffs in the federal workforce and at large companies like Starbucks and Southwest Airlines.
Continuing claims, which track people who have been receiving unemployment benefits for more than a week, decreased slightly to 1.86 million. However, the four-week moving average of claims, which smooths out weekly fluctuations, rose to 224,000, an increase of 8,500 claims.
There were significant increases in jobless claims in the New England region. In Massachusetts, the number of claims jumped by 3,731 to 9,179. Rhode Island also saw a sharp increase, with claims more than tripling to 2,964.
In other economic news, the U.S. Census Bureau reported a surprising 3.1% rise in orders for durable goods like aircraft, appliances, and computers in January. This was seen as a potential sign that consumers are trying to make major purchases ahead of expected increases in tariffs.
In contrast, the previous month had seen a 1.8% decline in durable goods orders. Excluding transportation, orders remained mostly flat, with a 3.5% rise when excluding defense-related goods.
On the trade front, President Trump announced that new 25% tariffs on imports from Mexico and Canada will go into effect on March 4. At the same time, China will face an additional 10% tariff. This move is part of the ongoing trade war that has led to increased costs for many U.S. consumers and businesses.
Additionally, the Commerce Department reported that the U.S. economy grew at an annualized rate of 2.3% in the fourth quarter of 2024, according to a second estimate for GDP. This figure was unchanged from the initial estimate.
Price indexes, which the Federal Reserve closely follows, showed slight upward revisions from earlier estimates. The personal consumption expenditures (PCE) price index, which tracks inflation, showed a 2.4% increase for the quarter. When excluding food and energy, the core PCE index rose by 2.7%.
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