The number of Americans filing for jobless benefits decreased last week, reflecting a resilient labor market ahead of an anticipated reduction in federal government employment.
According to the Labor Department, initial jobless claims fell by 21,000 to 221,000 for the week ending March 1, which was notably lower than analysts’ expectations of 236,000 new applications.
Jobless claims are often seen as an indicator of layoffs, and they have typically fluctuated between 200,000 and 250,000 for several years. The four-week moving average, which smooths out short-term fluctuations, rose slightly by 250 to 224,250.
Despite the current stability in the labor market, some analysts are predicting that upcoming layoffs, particularly within the federal workforce, could show up in future reports.
Earlier this week, two sources familiar with the matter told The Associated Press that the IRS is preparing to reduce its workforce by up to 50%—approximately 45,000 employees—through a combination of layoffs, attrition, and incentivized buyouts. These reductions are part of a broader effort by the Trump administration, through Elon Musk’s Department of Government Efficiency, to downsize the federal workforce. The sources requested anonymity because they were not authorized to discuss the plans publicly.
