The good news is, initial jobless claims in the US receded from a two-month high in the week to March 1, Thursday’s update showed.
The not-so-good news is, initial claims for federal workers rose sharply to the highest in more than four years late last month. Relatedly, announced job cuts in February soared to 172,017, the most for any February since the financial crisis, and the highest since July of 2020.
Those latter stats come from Thursday’s Challenger release, which captured the “impact” of DOGE. As the figure below shows, the MoM increase was rather pronounced, to put it politely.
“Private companies announced plans to shed thousands of jobs last month, particularly in Retail and Technology,” Andrew Challenger said, in the color accompanying the release, citing “DOGE actions, as well as canceled government contracts, fear of trade wars and bankruptcies.”
To make the obvious joke: Nothing says “American golden age” like trebled layoffs and bankruptcies, although to be fair, Trump did say he was going to run America like one of his businesses.
According to Challenger’s data, the government announced 62,242 job cuts in February across 17 federal agencies, bringing the YTD total to 62,530. If you’re keeping track at home, that’s a — and try not to laugh despairingly — 41,311% YoY increase.
“It appears the administration wants to cut even more workers,” Challenger remarked, dryly, adding that “when mass layoffs occur, it often leaves remaining staff feeling uneasy and uncertain,” which in turn increases the “likelihood that many more workers leave voluntarily.” Of course, that’s exactly what Elon Musk’s hoping for.
As a quick aside, it’s not obvious to this observer why so many Americans are happy about the prospect of a couple of billionaires, one of whom’s the richest man in all of human history, laying off our family members, spouses, neighbors and friends, in the process jeopardizing the provision of government services a lot of folks depend on. I’m reaching the functional limits of my patience with Wall Street strategists implicitly cheering that effort on.
As one myself, I’m sympathetic to insensitive jerks. But my rule of thumb in middle-age says that if you’re going to be an asshole, do it on your own time. Put differently: It’s one thing to revel in your own glory, but another entirely to revel in someone else’s misery. The former makes you a supercilious idiot, like me. The latter just makes you a hater, and not a very good one at that. You’re not supposed to hate on people who reside in lower tax brackets than you; that doesn’t make any sense. So, to Wall Street: Just stop it. Stop cheering DOGE on. It’s cruel and no, it’s not going to “fix” America’s fiscal problems.
Anyway, and coming back to the claims data, at 221,000, the initial filers headline was down 21,000 from the prior week, which means the biggest jump since early October was a mirage, apparently.
Consensus expected a smaller drop (to 232,000), so this counted as a constructive print ahead of payrolls and on the heels of a somewhat foreboding read on ADP private hiring. The four-week average is parked at 224,250.
In the week to February 22, the federal employees series mentioned here at the outset more than doubled, but Thursday’s DOL release showed initial claims in the DMV zone (the DOGE “blast radius,” if you will) actually fell a bit.
Continuing claims rose to 1.897 million, the highest in six weeks and ahead of estimates.
Meanwhile, the second estimate of Q4 unit labor costs found the ULC headline revised meaningfully lower, to 2.2%, and productivity revised up to 1.5%. Those adjustments won’t get any press on Thursday, but they’re worth a mention to the extent they constitute incrementally good news for the Fed.
This is just the beginning. Wall Street strategists are myopic to say the least. A better word would be selfish and heartless. And as a group, not very smart. Ben Franklin said it best, a fool know the price of everything and the value of nothing.
I am under the impression that unemployment claims by former federal employees are usually not included in state unemployment claims data or in the “headline” claims number.
” Claims filed by former federal workers are generally not included in the advanced initial claims count. A UCFE claim would only be included in the headline figure when it is a “joint” claim, where the claimant’s eligibility is based on both Federal and other regular covered wage earnings from a different job. ”
https://oui.doleta.gov/unemploy/ucfe/UnemploymentCompensation_FederalEmployees_WeeklyClaims_FactSheet.pdf
Claims by federal employees is reported separately, on a one-week lag. This seems to be moving up. Note there is usually a delay from firing until the former employee figures out how and where to file a claim and doing so.
” Initial claims for UI benefits filed by former Federal civilian employees totaled 1,634 in the week ending February 22, an increase of 1,020 from the prior week. There were 312 initial claims filed by newly discharged veterans, a decrease of 41 from the preceding week. There were 7,412 continued weeks claimed filed by former Federal civilian employees the week ending February 15, a decrease of 200 from the previous week. Newly discharged veterans claiming benefits totaled 4,306, a decrease of 3 from the prior week. ”
https://www.dol.gov/ui/data.pdf
I believe they are included. However, the survey week ended Feb 14th so most of the effects of federal employee layoffs won’t show in this report. The March report out in April will better reflect this.
The ramifications go far beyond just the people losing their jobs. My wife works with the VA and morale has completely collapsed in the organization. “See you tomorrow” at the end of a workday has turned into “See you tomorrow, maybe.” or “See you tomorrow, hopefully.”. With the leaked memo of 80,000 more firings coming everyone is expecting a dramatic drop in the level of care. Veterans just keep taking the hits, especially as 1/3 of the Federal workforce are veterans and an even higher percentage at the VA.
Priceless as usual.
If I got my news primarily from X and Fox, rather than also reading NYT and so on, and lived in America so what do I care about foreign policy, I think I too would be inclined to believe this is the greatest administration ever. The disconnect is huge. If that is your problem then things seem bad. Meanwhile if you’re totally isolated from the economic consequences of it – and not terribly concerned about society on general – then why not sacrifice some prosperity to win the culture war? For example, could be taking a 5% extra tax wouldn’t change one’s quality of life at all, but never having to deal with pronouns would. Just some ideas that one gets looking from outside in, trying to get it.
Trump approval rating still high in reddest areas. Low-information, low-empathy people need direct personal pain to pay attention. As many are also low-income, they will get it. I think some will figure out the cause, others will still be blaming Bidenomics in 2026.
JL – Trump himself has pointed to another culprit as well:
https://www.msn.com/en-us/money/markets/trump-blames-globalists-for-stock-market-sell-off/ar-AA1ApoHH?ocid=winp2fptaskbarmouseenter&cvid=9fc7ba49a9464e32bf5b62cff2d60e36&ei=64
Dear media,
STOP calling DOGE a department. It is NOT a department. What it is, is a bunch of snot-nosed, pock-faced Orcs headed up by a racist billionaire to wreak havoc on America and stuff his bottomless pockets. Start doing better.
-Thanks