Jobless Claims Climb by 7K Following Previous Week’s Drop

U.S. unemployment claims increased last week amid what remains a strong labor market.

Initial jobless claims rose by 7,000 to a seasonally adjusted 198,000 for the week ending March 25, the U.S. Department of Labor announced Thursday (March 30).

These numbers are generally seen as an indicator for the level of layoffs in the country. The previous week saw the number of new claims fall somewhat, from 198,000 to 197,000.

Meanwhile, the Labor Department said the four-week moving average of claims rose by 2,000 to 198,250, though it has remained below 200,000 for much of this year.

The trend has held steady as a number of high-profile layoffs made the news. During the week included in the Labor Department’s latest numbers, Amazon announced it was cutting 9,000 jobs, on top of the 18,000 positions the company eliminated in January.

This week saw Disney say it was shutting down its metaverse division, part of a broader pattern of layoffs that will impact 7,000 positions.

But as PYMNTS noted earlier this month, other sectors have picked up hiring, helping drive one of the lowest unemployment rates in decades.

A report March 5 by The Wall Street Journal says the leisure-and-hospitality industry had begun rebuilding its workforce following a wave of pandemic-era job cuts as the tech sector contracts.

And because this sector represents a larger number of jobs than tech firms, it has caused a shift in hiring patterns that’s kept the job market tight.

“The sectors that are seeing above-average layoffs are those that saw explosive growth after the pandemic,” ZipRecuriter Chief Economist Julia Pollak told the WSJ, referring to the tech and information industries.

Still, this year has seen a spike in job cuts, as PYMNTS reported recently, with layoffs seeing their highest level since 2009.

U.S.-based employers announced 77,000 cuts in February, down 24% from the 102,943 positions eliminated in January, according to the employment service Challenger, Gray & Christmas (CGG).

However, that figure was 410% higher than the numbers from 2022, as employers began to look to reduce costs amid rising interest rates.

“Certainly, employers are paying attention to rate increase plans from the Fed,” said Andrew Challenger, CGG’s senior vice president, in the report. “Many have been planning for a downturn for months, cutting costs elsewhere. If things continue to cool, layoffs are typically the last piece in company cost-cutting strategies.”