The number of Americans filing new claims for jobless benefits unexpectedly decreased last week, hinting at stable labor market conditions and a rebound in employment growth in March.
Initial jobless claims dropped by 8,000 to 205,000 in seasonally adjusted data for the week ending March 14, the Labor Department announced on Thursday. Economists surveyed by Reuters had predicted 215,000 claims for the previous week.
The government introduced new seasonal factors for 2026 and revised seasonal factors for 2021 to 2025. Seasonal factors are used to eliminate seasonal fluctuations from the data series. Employment claims data for the years 2021 to 2025 were revised.
Layoffs remained relatively low, even as companies were hesitant to increase their workforce due to uncertainty caused by President Donald Trump’s aggressive tariffs. Trump’s administration crackdown on immigration, which reduced the labor supply, also hindered employment growth, economists said.
The U.S. Supreme Court overturned tariff rights applied under a law intended for use in national emergencies, but Donald Trump imposed global tariffs of 10%, which he said would rise to 15%. Investigations were launched against some trading partners, which economists believe will lead to higher tariffs.
Businesses also face increased uncertainty due to the ongoing conflict between the United States and Israel with Iran, which has driven oil prices up over 40% since the conflict began in late February.
The Federal Reserve on Wednesday maintained its target federal funds rate at 3.50% – 3.75%. Policymakers anticipate inflation to rise, stable unemployment rates, and only one interest rate cut this year.
The data regarding compensation claims covered the period in which the government surveyed businesses for the “nonfarm payrolls” component of the March jobs report.
Payroll decreased by 92,000 jobs in February, marking the sixth decline since January 2025 and the second largest.
The severe winter weather, a healthcare sector worker strike, and the recovery from excessive wage gains recorded in January partly explain this decline. The slowdown in weather conditions likely abated in March, and healthcare workers returned to work, which should support job growth this month.
Nevertheless, job growth is nearly stagnant, with Fed Chair Jerome Powell telling reporters on Wednesday that “you have a sort of zero growth balance in employment,” adding “there is a risk of decline, and it’s not a very comfortable balance.”
The number of people receiving unemployment benefits after an initial week of aid, an indicator of hiring, rose by 10,000 to 1.857 million in seasonally adjusted data for the week ending March 7, according to the claims report.
Many jobless individuals, including recent college graduates, are experiencing long periods of unemployment. The unemployment rate increased from 4.3% in January to 4.4% in February.
