WASHINGTON (AP) – The number of Americans submitting unemployment claims decreased slightly last week as businesses continue to hold onto employees despite increasing economic uncertainty US Trade Policy.
The Labor Department reported on Thursday that applications for unemployment benefits dropped by 2,000 to 227,000 for the week ending May 17th. This figure is close to analysts’ forecast of 230,000 new applications.
This weekly measure of unemployment benefits is viewed as indicative of US layoffs and has nearly returned to a historically stable range since the COVID-19 pandemic devastated the economy and eliminated millions of jobs five years ago.
President Donald Trump has paused several of his tariff threats; however, concerns linger about a global economic slowdown that could impact the US labor market, which has been a foundation of the US economy for many years.
Last week, the US and China reached an agreement. Their trade war is currently on a 90-day pause, which is expected to boost financial markets and temporarily alleviate some concerns regarding the effects of tariffs on the US economy.
Earlier this month, the Federal Reserve maintained its benchmark interest rate at 4.3% for the third consecutive meeting following three reductions at the end of last year.
Federal Reserve Chairman Jerome Powell noted a growing risk of both rising unemployment and inflation. This unusual combination complicates the central bank’s dual goals of managing prices and keeping unemployment low.
Powell stated that tariffs have affected consumers and employment. The government recently reported that the US economy contracted at an annual rate of 0.3% in the first quarter of 2025 due to substantial tariffs that were enforced.
Trump is attempting to revitalize the global economy through considerable increases in import taxes, aimed at rejuvenating the US manufacturing sector.
Trump has also vowed to significantly reduce the federal workforce, but many of these proposed cuts are facing challenges in courts and Congress.
It remains unclear whether “Doge” will affect the upcoming weekly layoff data, or if and when “Doge” will implement cuts.
Despite signs of weakening over the past year, the labor market remains robust, with a wealth of job openings and relatively few layoffs.
Earlier this month, the government reported that US employers added an astonishing 177,000 new jobs in April, keeping the unemployment rate at a historically low 4.2%.
Many economists predict that the adverse effects of the trade war on American workers will become evident this year.
Microsoft announced layoffs last week, impacting approximately 6,000 workers, nearly 3% of its workforce, marking the largest reduction in over two years.
Other companies that have disclosed job cuts this year include Workday, Dow, CNN, Starbucks, Southwest Airlines, and Facebook’s parent company Meta.
The Labor Bureau also reported on Thursday that the four-week average of claims, designed to account for some volatility, rose by 1,000 to reach 231,500.
The total number of Americans receiving unemployment benefits as of May 10 increased by 36,000 to 1.9 million.
Source: apnews.com