US jobless claims fall to 219,000 as Trump's workforce cuts and tariff hikes trigger new concerns
Unemployment benefit applications in the United States fell by 6,000 to 219,000 for the week ending March 29, according to the US Department of Labor.
The total came in below analyst expectations of 226,000, The Canadian Press reported Thursday.
Despite the dip, the number remains within the 200,000 to 250,000 range seen in recent years. The four-week average, which smooths out weekly fluctuations, dropped by 1,250 to 223,000.
The US Department of Labor also reported that the total number of Americans receiving unemployment assistance rose by 56,000 to 1.9 million for the week ending March 22. That figure marks the highest level since November 2021.
The US labour market's resilience faces challenges from the Trump administration's recent tariff implementations.
On April 2, US President Donald Trump enacted “Liberation Day” tariffs, imposing a 10 percent baseline tariff on all imported goods, with higher rates for specific countries.
According to Barron’s, Economists warn that these measures could lead to increased inflation and a potential recession.
Former US Treasury Secretary Larry Summers estimated the tariffs could cost the economy US$30tn, while the average household might incur an additional $3,800 in expenses this year, as reported by Business Insider.
Weekly jobless claims are typically viewed as a proxy for layoffs. While the US labour market continues to appear resilient, recent policy shifts by the Trump administration have prompted fresh concerns.
Following an announcement of widespread tariff hikes, economists warned about a potential global economic slowdown that could threaten recent labour market stability.
At the same time, the Trump administration has begun implementing plans to significantly reduce the federal government workforce.
The Department of Government Efficiency, or “DOGE,” is overseeing the process and Elon Musk is spearheading the initiative.
“Like his pledge to institute tariffs, Trump’s promise to drastically downsize the federal government workforce is fully in motion,” said The Canadian Press article.
It remains unclear when the job reductions mandated through DOGE will appear in the weekly unemployment data.
However, some economists believe they could show up in the March US jobs report, scheduled for release Friday.
In February, the US federal government eliminated 10,000 positions — the most in a single month since June 2022.
On Monday, an internal email obtained by The Associated Press revealed that workers at the US Food and Drug Administration were told to pack their laptops and prepare for the possibility of not returning.
The US Department of Health and Human Services is expected to lose 20,000 jobs — almost one-quarter of its workforce — with 10,000 of those jobs eliminated through layoffs and the remaining 10,000 through early retirement and voluntary separation offers.
Layoff plans or announcements have also come from the IRS, Small Business Administration, Department of Veterans Affairs, and Department of Education.
According to The Business Journals, these US federal layoffs contribute to a broader trend of job reductions across various sectors. In the first quarter of 2025, 21 Massachusetts life sciences companies announced layoffs affecting at least 1,000 employees.
While the labour market has shown signs of weakening in the past year, it continues to show overall health.
In February, employers added 151,000 jobs, and although the unemployment rate rose to 4.1 percent, it remained historically stable.
FactSet analysts forecast that the March nonfarm payroll data will show a gain of 130,000 jobs, with the unemployment rate expected to inch up to 4.2 percent.
Major companies announcing job cuts in 2025 include Workday, Dow, CNN, Starbucks, Southwest Airlines, Chevron, JPMorgan Chase, and Meta, the parent company of Facebook.
The Business Insider reports that the US Federal Reserve is closely monitoring these developments.
Chair Jerome Powell indicated that the increased tariffs could lead to both heightened inflation and increased unemployment, presenting challenges for US monetary policy.
