US weekly jobless claims unexpectedly fall amid low layoffs

WASHINGTON, March 19 (Reuters) - The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, pointing to stable labor market conditions and a rebound in job growth in March.

Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 205,000 for the week ended March 14, the Labor Department said on Thursday. Economists polled by Reuters had forecast 215,000 claims for the latest week.

The government introduced new seasonal factors for 2026 and revised the seasonal factors from 2021 through 2025. Seasonal factors are the model used to strip out seasonal fluctuations from the series. Claims data was revised from 2021 through 2025.

Layoffs have remained relatively low even as businesses have been reluctant to increase headcount because of what economists said was uncertainty caused by President Donald Trump's sweeping tariffs. The Trump administration's immigration crackdown, which reduced labor supply, had also hampered job growth, they said.

The U.S. Supreme Court struck down the duties, pursued under a law meant for use in national emergencies, but Trump has imposed a 10% global tariff, which he said would rise to 15%. Investigations have been launched against some trade partners, which economists said would result in more tariffs.

Businesses also face more uncertainty from the U.S.-Israeli war with Iran, which has boosted oil prices by more than 40% since the conflict started at the end of February.

The Federal Reserve on Wednesday kept its benchmark overnight interest rate in the 3.50%-3.75% range. Policymakers projected higher inflation, a steady unemployment rate and only a single reduction in borrowing costs this year.

The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of March's employment report.

Payrolls decreased by 92,000 jobs in February, the sixth decline since January 2025 and the second largest.

Harsh winter weather, a strike by healthcare workers and payback following outsized payroll gains in January accounted for part of the decline. The weather drag likely faded in March and healthcare employees have returned to work, which should underpin job growth this month.

Nonetheless, employment growth has almost stalled, with Fed Chair Jerome Powell telling reporters on Wednesday that "you have got a sort of zero employment growth equilibrium," adding that "it does have a feel of downside risk, and it's not kind of a really comfortable balance."

The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 10,000 to a seasonally adjusted 1.857 million during the week ended March 7, the claims report showed.

Many unemployed people, including recent college graduates, are experiencing long spells of joblessness. The unemployment rate increased to 4.4% in February from 4.3% in January. (Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)