New Unemployment Claims Grow As Tech Layoffs Escalate, Fed Tries To Cool Economy

ZINGER KEY POINTS

• The advance number of actual initial claims under state programs, unadjusted, totaled 237,513 in the week ending March 4.
• Senators worry about the possibility of 2 million people losing their jobs this year on account of increased interest rates.

The number of Americans submitting new claims for unemployment benefits grew last week. For the week ending March 4, initial claims for state unemployment benefits jumped 21,000 to a seasonally adjusted 211,000, according to Labor Department statistics released Thursday.

Read on for a breakdown of the report.

• The advance seasonally adjusted insured unemployment rate was 1.2% for the week ending Feb. 25; that’s an increase of 0.1 percentage points from the previous week’s unrevised rate.
• The advance number for seasonally adjusted insured unemployment during the week ending Feb. 25 was 1,718,000; an increase of 69,000 from the previous week’s revised level.
• The previous week’s level was revised down by 6,000 from 1.655 million to 1.649 million.
• The four-week moving average was about 1.68 million, an increase of 9,500 from the previous week’s revised average.
• The previous week’s average was revised down by 1,500 from 1.672 million to 1.67 million.

Unadjusted Data

• The advance number of actual initial claims under state programs, unadjusted, totaled 237,513 in the week ending March 4.
• That’s an increase of 35,357 (or 17.5%) from the previous week.
• There were 219,875 initial claims in the comparable week in 2022.
• The advance unadjusted insured unemployment rate was 1.4% during the week ending Feb. 25, an increase of 0.1 percentage point from the prior week.
• The advance unadjusted level of insured unemployment in state programs totaled more than 1.9 million; an increase of 83,404 (or 4.4%) from the preceding week.

Why It Matters: 

The report comes on the heels of Fed Chair Jerome Powell‘s testimony before Congress this week about a possible new interest rate hike of 0.5% later this month.

The goal, Powell said, is to “cool” the economy.

In a blog post Tuesday, Robert Reich, former labor secretary under Bill Clinton, criticized the approach, stating there’s no need to continue to raise interest rate hikes, as inflation is already winding down, and he said being fixated on a 2% goal could end up hurting more than it heals.

“Why not 4%? Getting inflation down to 2% is going to cause too much pain for the most vulnerable,” he wrote.

Senators have expressed growing concern for the possibility of 2 million people losing their jobs this year on account of the increased interest rates.

The jobless claims report comes on the heels of mass layoffs across the tech industry. So far in March, Atlassian confirmed that it terminated 500 employees, or 5% of its total workforce; SiriusXM laid off 475 employees, or 8% of its workforce; Alphabet’s announced a round of layoffs for its Waymo unit; and Meta Platforms Inc is reportedly planning to terminate thousands more employees as well.

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Originally Posted March 9, 2023 – New Unemployment Claims Grow As Tech Layoffs Escalate, Fed Tries To Cool Economy