Applications for U.S. jobless benefits fell last week as the labor market remains sturdy ahead of an expected purge of federal government employees.
The number of Americans filing for jobless benefits fell by 21,000 to 221,000 for the week ending March 1, the Labor Department said Thursday. That’s significantly fewer than the 236,000 new applications analysts expected.
Weekly applications for jobless benefits are considered a proxy for layoffs, which have remained mostly in a range between 200,000 and 250,000 for years.
The four-week average, which evens out some of the week-to-week volatility, inched up by 250 to 224,250.
Some analysts expect layoffs ordered by the Department of Government Efficiency to show up in the report in the coming weeks or months.
Earlier this week, two people familiar with the situation told The Associated Press that the IRS is drafting plans to cut its 90,000-person workforce by as much as half through a mix of layoffs, attrition and incentivized buyouts. The people spoke Tuesday on condition of anonymity because they weren’t authorized to disclose the plans.
The layoffs are part of the Trump administration’s efforts to shrink the size of the federal workforce through billionaire Elon Musk’s Department of Government Efficiency.
Already, roughly 7,000 probationary IRS employees with roughly one year or less of service were laid off from the organization in February.
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 some signs of weakening during the past year, the labor market remains healthy with plentiful jobs and relatively few layoffs.
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.
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.
The total number of Americans receiving unemployment benefits for the week of Feb. 22 rose by 42,000 to 1.9 million.
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