Initial Claims for Unemployment benefits for the week ended February 22 rose by 22,000 to 242,000 as compared to the week prior. Analysts had expected claims to remain at 220,000. Given that this data is reported weekly, it is appropriate to expect a level of volatility. We believe that although the increase in claims bears watching, in conjunction with other recently released economic data, the overall number is still indicative of a modestly growing economy.
In addition to the weather, analysts are watching the impact that any layoffs occurring within the Federal Government as a result of the Department of Government Efficiency (DOGE). In our opinion this will take up to another month before drawing any initial conclusions.
We remain steadfast in our belief that the potential range of outcomes for the unprecedented policy decisions coming from the Trump Administration is much wider than that of a traditional politician. This holds true for the labor market. On one hand, shedding individuals that work for the Federal Government may increase unemployment over the short-term, but allow for it to right size and hopefully deploy the savings more productively elsewhere.
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