U.S. Initial Jobless Claims Increase Moderately, Massive Unemployment of Federal Employees May Affect Job Market Balance

On 20 February, Gold Ten reported that US initial jobless claims increased moderately last week, suggesting that the labour market remains on solid footing. In recent days, Elon Musk's Department of Government Efficiency fired thousands of federal employees. Unemployment claims for these furloughees were filed separately under the Unemployment Compensation for Federal Employees (UCFE) programme, with the data reported with a one-week lag. The White House wants to cut about 2.3 million federal workers, excluding the military and the post office. Unemployment remains at historically low levels, but that could change as workers who rely on federal contracts or funding lose their jobs. Federal government layoffs, hiring freezes and spending cuts are expected to have a ripple effect on local economies, especially in Washington, D.C., and neighbouring Virginia and Maryland, and trigger private sector layoffs.