U.S. layoffs hit highest level since 2020

Planned layoffs in the U.S. surged last month, reaching the highest level since mid-2020, according to data from Challenger, Gray & Christmas. The increase was largely attributed to government efficiency measures and corporate restructuring, with significant job cuts in federal agencies and the retail sector.

A separate report from the Labor Department showed a decline in new jobless claims, with 221,000 people filing for benefits in the week ending March 1, down from 242,000 the previous week. However, the number of continued claims rose to 1.897 million indicating ongoing economic uncertainty.

According to economic analysts, layoffs may be underreported due to delays in counting federal jobless claims. While weather conditions contributed to some job losses, experts suggest that deeper structural changes in industries including automation and shifting economic policies are playing a major role.

Challenger’s report highlighted that 172,017 job cuts were announced in February, more than double the January total. Of these, 62,242 layoffs were linked to federal workforce reductions, while the retail sector accounted for nearly 39,000 cuts.

Despite the rise in layoffs, Wall Street analysts expect the upcoming jobs report to show a modest employment gain of 160,000 jobs, with the unemployment rate holding steady at 4%. However private sector hiring appears to be slowing, as indicated by ADP’s report, which showed only 77,000 new jobs added in February.

Stock markets reacted negatively to the layoff reports with the S&P 500 and Tesla stocks experiencing declines. Analysts caution that ongoing economic adjustments and corporate cost-cutting measures could lead to further volatility in the job market.