In a development that threatens to hamper its post-pandemic recovery, New York experienced the largest increase in initial jobless claims among U.S. states for the week ending March 2, signaling a potential cooling off in what has been a rapidly recovering labor market.
Amid a backdrop of recovery in which New York celebrated the full return of private-sector jobs lost during the COVID-19 pandemic, the recent surge in jobless claims presents an unexpected challenge.
The Department of Labor's report issued Thursday shows New York leading the nation with an increase of 14,176 initial jobless claims, contrasting with the state's significant job recovery efforts and economic growth narrative.
The surge represents the highest recorded in a single week across the nation, spotlighting New York at a moment when its labor market appeared to be on an upward trajectory.
Last week, Governor Kathy Hochul issued an announcement highlighting New York's economic achievements, boasting a record high of more than 8.3 million private-sector jobs and fully recovering from the pandemic-induced job losses. January's job data underscored the state's success, with 47,000 private-sector jobs added, marking steep gains in the education, health services, leisure, hospitality and professional sectors.
However, the unexpected rise in jobless claims juxtaposes the narrative of robust recovery, indicating potential vulnerabilities in the labor market into the spring and summer. Experts, including Pantheon Macroeconomics senior economist Oliver Allen, suggest that while immediate data reflects a resilient job market, underlying trends hint at upcoming challenges.
"Cracks are starting to appear," Allen shared with Newsweek by email on the same day Hochul issued the release. "Several indicators of layoffs point to a significant rise in claims in the months ahead, including the Challenger layoff announcement numbers, which crept up further in February."
Ian Shepherdson, chairman and chief economist at Pantheon Macroeconomics, elaborated on the nuances of the jobless claims data, highlighting to Newsweek the impact of the annual revisions to seasonals dating to 2019.
"The revisions are modest and don't change the big picture. The current trend in jobless claims is about flat, at about 210K," Shepherdson said Thursday.
However, he signaled a cautious outlook based on several predictive indicators: "But the three leading indicators we track most closely—Challenger layoff announcements, WARN notices, and Google searches for 'claims benefits' all point to a clear upward trend in claims in the second quarter."
That, coupled with a "steep drop in the NFIB survey's measure of hiring intentions," suggests an impending slowdown, Shepherdson said.
"We are becoming increasingly worried that job growth is set to slow sharply in the spring," he said, hinting at potential headwinds in the labor market's recovery trajectory.
More broadly, overall U.S. jobless claims fell below expectations, with 209,000 initial claims reported for the week ending March 9, down from the previous week's revised level.
The national trend, however, while reflecting a still-resilient labor market, contrasts with New York's situation.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aj Fabino is a Newsweek reporter based in Chicago. His focus is reporting on Economy & Finance. Aj joined Newsweek ... Read more
