by Timothy McQuiston, Vermont Business Magazine Vermont initial weekly unemployment claims fell sharply last week after they had more than doubled at the end of February and then settled back down. For the week ending March 21, 2026, the Vermont Department of Labor reported that there were 330 new claims, down 131 from the previous week and up 36 from last year at this time. New claims had leveled off at under 400 after the holiday season and, other than that one spike, are now near their lowest this year. Meanwhile, total claims were 4,128, down 196 from the week before and are up 224 from last year at this time. Initial claims, which tend to be lowest in the summer, were 186 in September 2025.
Nationally, all three major stock indexes suffered for the fifth week as the bombing in Iran continued, the jobs report was weak and inflation persisted well above Fed targets, while GDP was revised down to 0.7%. The Fed, which met last week, left interest unchanged, as expected. But the poor employment numbers coupled with a sagging stock market (the Dow, S&P and Nasdaq are all in the red for 2026 and fell steeply again this week) had put pressure on the Fed to cut rates to stimulate the economy.
But with inflation pushing upwards in addition to the recent spike in oil and gas prices (Vermont average as of March 27, 2026: $3.90; US average $3.97), there is talk of the Fed raising rates to help reduce inflation. Brent crude today topped $112 a barrel.
In Vermont for the weekly labor UI claims report, manufacturing accounted for 18% of the total, down 5 points from the previous week. Manufacturing overall has become a smaller part of the Vermont economy over the last 25 years and that trend appears to be continuing. The Service industry, which typically accounts for the most claims, last week reported 49% from the previous week, unchanged. Construction was 15%, up 3 points.
Accoding to the US DOL, for the week ending March 21, the advance figure for seasonally adjusted initial claims was 210,000, an increase of 5,000 from the previous week's unrevised level of 205,000. The 4-week moving average was 210,500, a decrease of 250 from the previous week's unrevised average of 210,750.
The Vermont Unemployment Trust Fund is well capitalized. As of the most recent data, there was $308.9 million in the Trust Fund, down $2 million from the previous week (as claims are paid out on one side, employers are contributing to the fund on the other). The pre-pandemic Trust Fund balance on March 1, 2020, was $506.2 million.
Tax revenues slip below targets in February
Secretary of Administration Sarah Clark on March 27 released Vermont’s revenue results for February 2026. The General and Transportation Funds both missed their monthly targets, and the Education Fund exceeded its monthly target. Cumulatively, the total year-to-date is slightly below expectations.
The State’s General Fund, Transportation Fund, and Education Fund receipts were a combined $196.26 million, representing collections -$5.86 million, or 2.9%, below the $202.12 million monthly target from the consensus forecast adopted by the Emergency Board at its January 16, 2026, meeting.
Total General Fund revenues for February were $116.01 million, -$3.89 million, or 3.25%, below the $120.01 million monthly cash flow target. The Personal Income Tax, the state's most important GF revenue source, had a strong month at 8% over targets. Meals & Rooms also did well, suggesting that tourism had a good month of February. Those taxes were undermined by weakness in Corporate and Insurance Premium results, which were down for the month and down for the year-to-date, as the state comes down the stretch of the fiscal year (June 30).
Revenues in the Transportation Fund were $18.13 million, representing collections -$3.86 million, or 17.54%, below target, with receipts for Gasoline and Diesel taxes representing the largest shortfalls from the target. All the major sources were below expectations, including the gas tax and vehicle purchase.
Monthly Education Fund revenues of $62.02 million were $1.9 million, or 3.7%, above their February cash flow target of $60.12 million, with all components except for Sales Tax and Motor Vehicle Purchase & Use finishing ahead of monthly consensus targets. The Education Fund was supported by Meals & Rooms and a strong month for lottery sales.
Vermont’s unemployment rate holds at 2.6 percent in December
The Vermont Department of Labor has reported that the seasonally adjusted statewide unemployment rate for December was 2.6%. This reflects no change from the prior month’s revised estimate. Vermont has the third-lowest rate in the nation behind a tie behind Hawaii and South Dakota (2.2%). California has the highest rate at 5.5%.
The comparable United States rate in December was 4.4%, a decrease of one-tenth of one percentage point from the revised November estimate.
The civilian labor force participation rate was 64.0% in December, a decrease of two-tenths of one percentage point from the prior month’s revised estimate.
The data continues to show significant reductions in the Labor Force and Employed month-to-month and year-to-year. The Labor Force is the denominator in the equations, so when it goes down it minimizes the losses in the Employed category. The number of Unemployed is essentially unchanged.
See data tables below.
"The Vermont Department of Labor works directly with employers to help them hire, retain, and support the workers they need to succeed,” said Kendal Smith, Vermont Department of Labor Commissioner. “At the same time, we are helping Vermonters connect with available job opportunities as labor market conditions shift. Maximizing every working Vermonter’s potential helps workers build sustainable careers while strengthening and stabilizing Vermont businesses. Through partnerships with local Department of Labor offices (https://labor.vermont.gov/workforce-development/job-centers), businesses can access customized services and resources, while workers can explore additional training or education options to support their next steps.”
The seasonally adjusted Vermont data for December show the Vermont civilian labor force decreased by 1,171 from the prior month’s revised estimate. The number of employed persons decreased by 1,207 and the number of unemployed persons increased by 36. The changes to the labor force and the number of employed persons were statistically significant in the seasonally adjusted series.
To support vital journalism, access our archives and get unique features like our award-winning profiles, Book of Lists & Business-to-Business Directory, subscribe HERE!
