by Timothy McQuiston, Vermont Business Magazine Weekly unemployment claims fell to their lowest levels in almost three months for the week ending February 1, 2025. New claims were 348, down 43 claims from the week before and are 49 fewer from last year. The holiday season brings wild swings in claims as temporary workers are hired and then laid off. The stability of the last few weeks should last until the end of the ski season. Claims were 181 at the end of September 2024.
For the month of December the US jobs report beat expectations, while the US unemployment rate fell one-tenth to 4.1% for December and another tenth in January 2025 to 4.0%. The US rate always precedes the state rates by at least a couple of weeks. The Vermont unemployment rate in December held at 2.4%, which is the second lowest in the nation.
As a reminder, the Vermont Department of Labor has announced an increase to the State’s minimum wage, which began January 1, 2025. The State’s minimum wage will increase from $13.67 to $14.01 per hour - an increase of $0.34.
This annual adjustment also impacts the minimum wage for tipped employees. The “Basic Tipped Wage Rate” for service, or “tipped employees,” equals 50% of the full minimum wage. On January 1, 2025, the tipped minimum wage will increase from $6.84 to $7.01 per hour.
The State’s tipped minimum wage law allows employers to pay a lower hourly rate, as long as the employee receives tips equal to, or greater to than, the standard minimum wage during a given shift. In cases where the employee does not receive enough in tips during a workweek to equal the standard minimum wage per hour, the employer is required to pay the difference in order to ensure the tipped wage employee is compensated at the non-tipped minimum wage amount.
In Vermont for the weekly report, the Service industry accounted for the most claims last week with 41%, up 6 points. Construction was at 31%, down 7 points. Manufacturing accounted for 9% of claims, down from 10%.
See more tables below.
For the week, total unemployment insurance claims were 4,083 for the week (up 1 for the week and down 217 from this time last year).
For the United States, in the week ending February 1, the advance figure for seasonally adjusted initial claims was 219,000, an increase of 11,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 207,000 to 208,000. The 4-week moving average was 216,750, an increase of 4,000 from the previous week's revised average. The previous week's average was revised up by 250 from 212,500 to 212,750.
Reuters is reporting that while the increase is moderate, hiring has been "tepid." The indicated that this is no cause for concern.
Reuters continued: "Labor market resilience is the driving force behind the economic expansion and has given the Federal Reserve room to pause interest rate cuts while policymakers assess the impact of the fiscal, trade and immigration policies of President Donald Trump's administration, which economists view as inflationary."
The Fed left its benchmark overnight interest rate unchanged in the 4.25%-4.50% range in January, having reduced it by 100 basis points since September, when it embarked on its policy easing cycle. The Fed hiked rates by 5.25 percentage points in 2022 and 2023 to tame inflation.
The US DOL advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending January 25, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 25 was 1,886,000, an increase of 36,000 from the previous week's revised level. The previous week's level was revised down by 8,000 from 1,858,000 to 1,850,000. The 4-week moving average was 1,872,250, an increase of 2,250 from the previous week's revised average. The previous week's average was revised down by 2,000 from 1,872,000 to 1,870,000.
In December Public Assets Insitute reported, Vermont's personal income was up 6 percent in 2023, which is the fastest median rate increase in the nation. PI grew by 3 percent in the US and only four states saw income drop: Alabama, Minnesota, North Dakoka and Iowa.
Meanwhile, PAI recently released its State of Working Vermont 2024 report, which concluded that: "More than half of single adults in Vermont, with kids or without, cannot afford to meet their basic needs. Even many two-earner households fall short. Meanwhile, the wealthiest Vermonters have over $1 million left annually after covering their needs.
"The state budget reflects our priorities. Healthcare and pre-K-through-12 public education each account for about a third of the total state budget. But the other policies and programs that help make Vermont affordable—like cash assistance, food programs, childcare subsidies, and housing support—together account for only 10 percent. That means reasonable, targeted investments in these areas can make a big, immediate difference to Vermonters struggling to afford their basic needs.
"Our laws enshrine the promises we’ve made to each other: that everyone has quality healthcare, housing, dignified work, education, food, social security, and a healthy environment. We have the resources to deliver on these promises and make Vermont a state that is both affordable and equitable for everyone who lives here."
"The November jobs report shows an expected rebound in hiring and no major surprises,” said Eric Merlis, managing director and co-head of global markets at Citizens. “The slight uptick in the unemployment rate and dip in the participation rate should convince the Fed to continue its gradual easing path at the December meeting.”
Meanwhile the Vermont Unemployment Trust Fund is well capitalized. As of the most recent data, there was $307 million in the Trust Fund, up about $3 million (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.
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