by Timothy McQuiston, Vermont Business Magazine Weekly unemployment claims increased for the week ending March 1, 2025, and climbed over 600 as claims have doubled in the last two weeks. New claims were 671, up 256 claims from the week before and are 69 more from last year. Claims, which tend to be lowest in the summer, were 181 at the end of September 2024.
It is not clear if this increase is the result of the dismissal of federal workers by DOGE, or an earlier than usual increase resulting from seasonal ski season layoffs.
CNBC is reporting that nonfarm payrolls increased by a seasonally adjusted 151,000 on the month, better than the downwardly revised 125,000 in January but less than the 170,000 consensus forecast. CNBC said outplacement firm Challenger, Gray & Christmas reported earlier this week that announced layoffs under Musk’s efforts totaled more than 62,000.
According to the US DOL, in the week ending March 1, the advance figure for seasonally adjusted initial claims was 221,000, a decrease of 21,000 from the previous week's unrevised level of 242,000. The 4-week moving average was 224,250, an increase of 250 from the previous week's unrevised average of 224,000.
The US unemployment rate for January 2025 was 4.0%. The Vermont unemployment rate in December held at 2.4%, which is the second lowest in the nation. However, in order to rectify the annual data, the state January rate will not be released until March 17.
In Vermont for the weekly report, the Service industry accounted for the most claims last week with 41%, up 5 points. Construction was at 15%, down 12 points. Manufacturing accounted for 11% of claims, unchanged.
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For the week, total unemployment insurance claims were 4,484 for the week (up 390 for the week and up 244 from this time last year).
Interest rates also remain stubbornly high, with mortgage rates in Vermont now around 6.3%.
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.
In December Public Assets Institute 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.
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.
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 $300.5 million in the Trust Fund, down about $1.9 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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