The number of Americans filing new unemployment claims rose slightly last week, while the unemployment rate appears to have remained stable in February. The latest data points to a labor market that is steady but not accelerating.
According to the U.S. Labor Department’s weekly report, initial claims for state unemployment benefits increased by 4,000 to a seasonally adjusted 212,000 for the week ended February 21. Economists had expected 215,000 claims. The reporting period included the Presidents’ Day holiday, which may have influenced the figures.
Despite the modest uptick, jobless claims remain below levels recorded during the same period last year. The data suggests the labor market continues to operate in what analysts describe as a “low-hire, low-fire” environment.
Stable labor market supports steady Fed outlook
The resilience of the labor market has reinforced expectations that the Federal Reserve is unlikely to cut interest rates in the near term. Economists believe policymakers will remain cautious as long as employment conditions remain stable and inflation stays above target.
Carl Weinberg, chief economist at High Frequency Economics, noted that the latest figures show no sign of widespread layoffs typically associated with the early stages of a recession. A stable employment backdrop may reassure traders who anticipate that the Fed will hold rates steady.
The labor market is gradually regaining momentum after experiencing softer conditions last year. Some economists attributed that slowdown to uncertainty surrounding President Donald Trump’s broad tariff policies.
The U.S. Supreme Court recently struck down those tariffs, which had been implemented under emergency powers legislation. In response, the administration introduced a temporary 10% global tariff for 150 days, later increasing the rate to 15%. While the policy shift has created short-term uncertainty, many economists expect the overall economic impact to be limited.
Hiring concerns remain despite stable claims
Although layoffs remain contained, weak hiring continues to be a concern. Nancy Vanden Houten, lead U.S. economist at Oxford Economics, said the low hiring rate remains the most troubling aspect of the current labor market.
Continuing claims, which reflect the number of people receiving unemployment benefits after their initial week of aid, declined by 31,000 to 1.833 million for the week ended February 14. This measure serves as a proxy for hiring conditions. However, continuing claims rose modestly between the January and February survey periods used to calculate the unemployment rate.
The jobless rate eased to 4.3% in January from 4.4% in December. The Chicago Fed projects the unemployment rate to remain near 4.3% in February.
Consumer anxiety and AI-driven uncertainty
While headline data shows stability, consumer confidence in the labor market remains fragile. A recent survey from the Conference Board indicated that the share of Americans who view jobs as “hard to get” climbed to a five-year high in February. At the same time, households reported some improvement in overall job availability.
The median duration of unemployment is approaching four-year highs, and job opportunities remain limited for recent college graduates. Many unemployed graduates are not captured in jobless claims data because they lack sufficient work history to qualify for benefits.
Economists caution that continuing claims do not provide a complete picture of unemployment trends, as long-term unemployed individuals and new entrants to the labor force are often ineligible for benefits.
Artificial intelligence is also contributing to labor market uncertainty. AI adoption has been linked to layoffs in the technology sector, raising concerns among skilled workers about long-term job security. Recent discussions among technology professionals highlight growing anxiety over extended periods of unemployment and the impact of automation on future hiring prospects.
Overall, the latest jobless claims data suggests a stable but cautious labor market, with hiring softness and structural shifts such as AI adoption shaping the outlook.
