The latest US weekly initial jobless claims report, by the Department of Labor, showed initial claims rising slightly by 4,000 to a seasonally adjusted 212,000 for the week ending February 21.
This figure came in below economists’ expectations, which were around 215,000–217,000. The prior week’s figure was revised to 208,000. The increase was modest and influenced by the Presidents’ Day holiday in the reporting period, which can sometimes distort weekly data.
The four-week moving average (smoothing volatility) ticked up slightly to about 220,250. Continuing claims; people receiving ongoing benefits dropped by 31,000 to 1.833 million for the week ending February 14, signaling that laid-off workers are finding new jobs relatively quickly.
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Layoffs remain at historically low and healthy levels, pointing to a resilient and stable labor market despite the small uptick in new filings. This supports expectations that the unemployment rate will hold steady around 4.3% for February (Chicago Fed forecast: 4.28%, likely rounding to 4.3%), following January’s drop to 4.3% from 4.4%.
This data is viewed as a positive sign for economic stability, with the labor market cooling only marginally rather than showing stress. The next major jobs report (nonfarm payrolls for February) is due in early March 2026. This reinforces a picture of a stable, resilient labor market with low layoffs (historically healthy levels), even amid some broader softness in hiring from prior uncertainty; tariffs, past high rates, and government shutdown effects.
The data points to a “low-hire, low-fire” environment where the labor market is stabilizing rather than weakening significantly. Layoffs remain subdued, and continuing claims fell to 1.833 million. This reduces urgency for immediate rate cuts, as downside risks to employment appear contained.
No cut expected at the March 17-18 FOMC meeting: Economists and market reactions suggest the Fed is likely to hold the federal funds rate steady at 3.50%–3.75%. The report bolsters views that the Fed won’t ease before Jerome Powell’s term ends in May 2026.
Market pricing shows very low odds ~4% of a March cut, with expectations shifted toward possible easing in mid-to-late summer or later.
Forecasts point to the rate holding steady around 4.3% for February; nonfarm payrolls report due March 6. A stable or slightly higher reading would align with full employment, giving the Fed room to prioritize inflation progress over labor support.
Recent stronger-than-expected January jobs data (130,000 added, unemployment at 4.3%) already tilted sentiment toward patience. Inflation remains above the 2% target in parts, with uncertainties like potential tariff policies adding upside risks.
Incoming Chair nominee Kevin Warsh may bring a different approach, but near-term policy under Powell appears hawkish-leaning, with markets pricing roughly 2–2.25 quarter-point cuts by end-2026 potentially starting later in the year. Some analysts note mixed signals: low claims are positive, but other indicators.
Slower hiring, past weak GDP partly from shutdown effects could still allow for easing if inflation cools further or labor softens. This claims report is mildly positive for economic stability but neutral-to-hawkish for Fed easing expectations. It keeps the door open for cuts later in 2026 if data trends dovish, but it doesn’t push for action soon. The March jobs report will be the next major data point shaping the outlook.