MW Is the economy really losing jobs? The low number of unemployment filings says no.
By Jeffry Bartash
Jobless claims are near the lowest level ever
Aside from lots of job cuts in the federal government, layoffs in the U.S. are extremely low.
Is the U.S. economy really losing jobs, as the February employment report found? Not according to the low number of people applying for jobless benefits.
New jobless claims fell by 8,000 in the middle of March to a two-month low of 205,000, the government said Thursday. The number is seasonally adjusted.
The raw or actual number of new unemployment filings - before seasonal adjustments, that is - looked even better. They dropped to a scant 190,370 last week and touched a five-month low.
Actual claims are also a lot lower now compared with the same week one year ago.
Before the pandemic, actual jobless claims rarely fell below 200,000 in records dating to the 1970s.
Jobless claims tell investors virtually nothing about whether businesses are hiring, but they clearly show most companies are shunning big layoffs. Economists call it a "low-hire, low-fire" labor market.
In February, the Bureau of Labor Statistics reported that the economy lost 92,000 jobs. The loss in employment followed an increase of 126,000 new jobs in January.
Economists are unsure what to make of the reported decline in February employment. Some note that a major nurses' strike and severe winter weather played a role in the negative print.
The March employment report could be more telling, they say.
Federal Reserve Chair Jerome Powell said the best way to look at job creation so far in 2026 is to combine the January and February employment reports.
"If you put them together, you get something in the middle," he said.
What does that mean, exactly? "Effectively there's zero net job creation in the private sector," Powell said Wednesday after the Fed voted to leave a key borrowing rate unchanged.
Normally, such a state of affairs in the labor market would be viewed as a terrible sign, but Powell also pointed out that the labor market is not growing for the first time in American history.
As a result, the unemployment rate is now the best measure of health for the labor market. The jobless rate ticked up to 4.4% in February from 4.3%, but it's still extremely low historically.
"It's been stable since September, so that tells you that," Powell said.
The economy can still grow at a vigorous pace even if it's not adding net jobs, analysts say, so long as businesses retain most employees and layoffs stay low.
That's why economists pay close attention to the weekly jobless-claims report. Jobless claims rise when businesses start cutting jobs and laying off workers, making them one of the best early warning signs of a worsening economy.
So far the labor market's vital signs look stable.
Key details: The number of people already collecting unemployment benefits, known as continuing claims, rose by 10,000 to 1.86 million in early March.
These claims have leveled off since last fall, another sign the labor market is stable.
Big picture: The job market is stuck in a purgatory of sorts - it's not getting any better, but it's also not getting worse.
Hiring is unlikely to pick up, economists say, until the Iran conflict fades and legal fights over the Trump administration's tariffs are sorted out.
Looking ahead: "It's a hard time for job seekers, but it's encouraging to see that layoffs remain low," said chief economist Heather Long of Navy Federal Credit Union. "This is an era of job-clinging - both companies and workers are not eager to leave."
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX fell in Thursday trading. Oil prices rose and market jitters tied to the conflict in Iran weighed on stocks.
-Jeffry Bartash
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 19, 2026 09:40 ET (13:40 GMT)
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