Summarize this content to 2000 words in 6 paragraphs Applications for U.S. jobless benefits rose to a three-month high last week but remained within the same healthy range of the past three years.The number of Americans filing for jobless benefits for the first time rose by 22,000 to 242,000 for the week ending Feb. 22, the Labor Department said Thursday. Analysts had projected that 220,000 new applications would be filed.Weekly applications for jobless benefits are considered a proxy for layoffs.The four-week average, which evens out some of the week-to-week volatility, climbed by 8,500 to 224,000.Some analysts say they expect layoffs ordered by the Department of Government Efficiency to show up in the report in the coming weeks or months.
“While still far below recession level, this is the highest number of weekly claims yet this year, and that’s a yellow caution light for the economy,” Andrew Stettner, unemployment insurance (UI) expert at The Century Foundation and former Biden administration UI modernization director, said in a report. “What’s more, these worrying indicators don’t include hundreds of thousands of layoffs announced by the federal government.” On Wednesday, senior U.S. officials set the government downsizing in motion via a memo dramatically expanding President Donald Trump’s efforts to scale back a workforce. Thousands of probationary employees have already been fired, and now the Republican administration is turning its attention to career officials with civil service protection.Government agencies have been directed to submit by March 13 their plans for what is known as a reduction in force, which would not only lay off employees but eliminate positions altogether. Despite showing signs of weakening during the past year, the labor market remains healthy.
Earlier this month, the Labor Department reported that U.S. employers added 143,000 jobs in January, significantly fewer than December’s 256,000 job gains. However, the unemployment rate ticked down to an even 4%, signaling a still very healthy labor market.
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Even so, some economists in their review of the latest jobless data see signs of a potential downturn.”Today’s figure is a big departure from the previous downtrend. It brings the level of claims back to where they were at the end of last summer, but going the other way this time,” analysts with High Frequency Economics said in a report. “HFE is already forecasting a sharp slowdown in GDP in the first quarter from the fourth to under 1%. We will mark that down further if [President Trump] goes ahead with 25% tariff barriers on the Northern and Southern borders,” they added.Continuing claims also riseContinuing claims in the week ending Feb. 15 were also up, noted Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, in a note on the latest jobless claims data. “Our final chart shows that continuing claims are closely correlated with the number of people unemployed for less than 26 weeks, said Tombs, adding that “the number of people who are unemployed but who have exhausted their 26-week entitlement to jobless benefits likely has continued to rise.”Late in January, the Federal Reserve left its benchmark lending rate alone after issuing three cuts late in 2024. Fed officials are closely monitoring inflation and the labor market for signs of a potentially weakening economy. They expect only two rate cuts this year, down from previous projections of four.
The most recent government consumer prices report that showed that inflation accelerated last month, creating some doubt about whether the Fed will be moved to cut rates at all this year.
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The new jobless benefits claims data shows that inflation has remained stubbornly above the Fed’s 2% target for roughly the past six months after it fell steadily for about a year and a half. The consumer price index increased 3% in January from a year ago, up from a 3 1/2 year low of 2.4% in September. According to the CPI report, egg prices, which continue to soar, jumped more than 15% in January from a year ago, to approximately $4.95 a dozen. In 2019, consumers could pick up a dozen eggs for around $1.54, but by last year the price had soared to $4.15 — a 170% increase, according to CBS News’ price tracker of everyday goods. Overall, while layoffs remain low by historical standards, some high-profile companies have announced job cuts already this year.Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta have all trimmed their workforces already in 2025. Late in 2024, GM, Boeing, Cargill and Stellantis announced layoffs.The total number of Americans receiving unemployment benefits for the week of Feb. 15 fell by 5,000 to 1.86 million.
