Increase in America’s weekly jobless claims
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New applications for U.S. unemployment benefits rose slightly last week, suggesting the labor market remains stable and giving the Federal Reserve room to keep interest rates steady while monitoring inflation risks linked to the Middle East conflict.
Initial claims for state unemployment benefits rose by 5,000 to a seasonally adjusted 210,000 for the week ending March 21, the Labor Department said Thursday. Economists polled by Reuters had expected 210,000 claims for the latest week.
Claims have been kept in the range of 201,000-230,000 amid fewer layoffs this year.
Economists said uncertainty caused by President Donald Trump’s aggressive import tariffs has dampened demand for workers, with private nonfarm payrolls averaging just 18,000 jobs per month in the three months through February. He said the reduction in labor supply due to the Trump administration’s strict immigration policy is also having an impact on job growth.
This leads to what Fed Chair Jerome Powell this month called a “zero employment growth balance,” with “a sense of downside risk.”
Although economists expect the labor market to remain stable, the US-Israel war with Iran has raised concerns about a rise in inflation. Oil prices have surged more than 30 percent since the conflict began in late February.
Import and producer prices rose in February, and economists expected the impact of the war, which has also driven up fertilizer prices, to be evident in March consumer inflation data.
As the conflict rages on, economists have been steadily raising their inflation forecasts for this year.
The US central bank has left its benchmark overnight interest rate in the range of 3.50 per cent-3.75 per cent this month. Policymakers have forecast only a decline in borrowing costs this year.
The chances of a rate cut appear to be diminishing in financial markets.
The claims report showed that the number of people receiving unemployment benefits, after the initial week of aid, fell by 32,000 to a seasonally adjusted 1.819 million during the week ended March 14. The so-called continuous claims data covers the period during which the government surveyed households for the March unemployment rate.
Although sustained claims have declined from last year’s highs, it may partly reflect that some people are exhausting eligibility for benefits, which is limited to 26 weeks in most states.
Last year’s unemployed college graduates are not included in the data because they are not eligible for benefits because they likely have limited or no work history. The unemployment rate increased from 4.3 percent in January to 4.4 percent in February.
first published: 26 March 2026 | 6:39 pm First
