US layoffs fall sharply, but unemployment insurance claims unchanged

The United States Department of Labour reported that initial unemployment insurance claims were 213,000 for the week ending 28 February after seasonal adjustment, unchanged from the previous week. Economists surveyed by Reuters had forecast 215,000 claims.

The data comes after the labour market slowed last year. Uncertainty rose due to broad import tariffs imposed by President Donald Trump under the National Emergencies Act.

The Federal Reserve’s Beige Book, released on Wednesday, described the employment level as “generally stable in recent weeks as seven of twelve districts reported no change in hiring.” It also noted that “contacts in several districts cited rising input costs, weaker demand, or uncertainty about overall economic conditions as reasons for flat or lower hiring.”

A separate report from employment consultancy Challenger, Gray & Christmas showed US-based firms announcing 48,307 job cuts in February, down 55 percent from January and down 72 percent from February last year.

Hiring plans rose 140 percent versus January, but were still down 63 percent from the same period last year.

The decline in layoffs has not been accompanied by a quickening of hiring. This has left some job seekers unemployed for longer.

New college graduates are not included in the claims data because they do not yet have a work history that qualifies for benefits.

The claims data do not affect February’s employment report, which will be released on Friday, as the figures fall outside the survey period.

Reuters’ survey estimated non-farm payrolls would rise by 59,000 in February after a gain of 130,000 in January. The unemployment rate was expected to hold at 4.3%.

Some economists view tax cuts as potentially boosting demand and helping the labour market strengthen this year. The trajectory of fiscal and monetary policy in the coming months will determine the resilience of the recovery.