US weekly jobless claims jump to two-month high

Free Malaysia Today01-05-2025

Jobless benefit recipients increased by 83,000 to 1.916 million, the highest since November 2021, indicating slower hiring. (EPA Images pic)
WASHINGTON : The number of Americans filing new applications for jobless benefits surged to a two-month high last week, but that likely did not mark a material shift in labour market conditions as the rise was related to school spring breaks in New York state.
Nonetheless, the labour market is softening, with the report from the Labor Department on Thursday also showing unemployment rolls swelled to levels last seen nearly 3-1/2 years ago.
Businesses in general have mostly adopted a wait-and-see attitude to President Donald Trump's aggressive trade policy, and are retaining their workforces, while remaining cautious about adding headcount.
'While part of it appears to be related to the difficulty of seasonally adjusting the data during school spring breaks and the Easter and Passover holidays, especially in New York state, it is troubling that the nation's unemployment rolls have shot up, reflecting the difficulties the jobless have in finding new work,' said Christopher Rupkey, chief economist at FWDBONDS.
Initial claims for state unemployment benefits jumped 18,000 to a seasonally adjusted 241,000 for the week ended April 26, the highest level since February. Economists polled by Reuters had forecast 224,000 claims for the latest week.
Unadjusted claims rose 12,901 to 223,614 last week. They were lifted by a surge of 15,525 in filings in New York state. Claims in Massachusetts shot up 3,251, helping to more than offset notable declines in Connecticut and Missouri.
The economy contracted last quarter for the first time in three years, swamped by a flood of imports as businesses tried to avoid duties from the Trump administration's tariffs.
Economists expect the tariffs to result in a wave of job losses. Expected to be a drag on domestic demand, the tariffs already are prompting some companies to reduce staff. United Parcel Service said on Tuesday it would slash 20,000 jobs and shut 73 facilities as part of a planned reduction in deliveries for Amazon.com.
'While the labour market is far from recessionary territory, it could turn if other companies follow UPS' suit and start trimming payrolls,' said Andrew Stettner, director of economy and jobs at the Century Foundation.
US stocks opened higher. The dollar rose against a basket of currencies. US Treasuries were mixed.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, soared 83,000 to a seasonally adjusted 1.916 million during the week ending April 19, the highest level since November 2021, the claims report showed.
The claims data have no bearing on April's employment report, scheduled for release on Friday. Nonfarm payrolls likely increased by 130,000 jobs last month after rising by 228,000 in March, a Reuters survey of economists showed. The unemployment rate is forecast to be unchanged at 4.2%.
'We expect firms have already started slowing their hiring, and we expect to see news of that in tomorrow's payroll employment report,' said Carl Weinberg, chief economist at High Frequency Economics.

Hashtags

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Nepal's US trade preference at risk amid growing tariff tensions

The Star

2 hours ago

The Star

Nepal's US trade preference at risk amid growing tariff tensions

KATHMANDU: New tariff tensions could further undermine the modest gains of least developed countries (LDCs), small island developing states (SIDS) and landlocked developing countries (LLDCs), according to a recent report. The United Nations Conference on Trade and Development, in its May publication titled 'Sparing the Vulnerable: The Cost of New Tariff Burdens', warns that these vulnerable economies could face some of the highest new US tariffs. This could lead to a decline in critical exports and pose substantial risks to their long-term development prospects. The report defines 'vulnerable economies' as LDCs, SIDS, and LLDCs—nations already struggling with structural economic and geographic disadvantages. 'US President Donald Trump is creating tariff uncertainty as a bargaining tactic in trade negotiations,' said Purushottam Ojha, a former commerce secretary. 'There is uncertainty in US tariff policy, with new tariffs being imposed, suspended, and then reinstated without predictable patterns.' Ojha noted that Nepal's trade benefits under the Nepal Trade Preference Programme are set to expire this year, potentially creating new hurdles for exporting goods to the US market. 'This tariff uncertainty increases the cost of trade, which can have a wider impact on economies that heavily rely on imports,' he said. 'The erratic US tariff policy is not a healthy sign for global trade.' The US recently increased tariffs on steel and aluminium from 25 per cent to 50 per cent and imposed 45–50 percent tariffs on products from several countries, though these have been temporarily suspended for 90 days. According to Ojha, one silver lining is that the tariff differential between Nepal and other countries has temporarily improved the competitiveness of Nepali goods. 'But with the implementation of new US tariffs still unclear, it's hard to rely on this advantage.' In the last fiscal year, Nepal recorded a trade deficit of Rs2.16 billion (US$15.8 million) with the US. According to the Department of Customs data, Nepal exported goods worth Rs17.31 billion to the US while imports totalled Rs19.48 billion. Top Nepali exports to the US included carpets, dog chew, felt goods, readymade garments for men and women, ceramic goods, pashmina, essential oils, musical instruments, handmade paper and cotton bags. Meanwhile, Nepal imported items such as soybeans, coal, oil cake, aircraft and helicopter parts, printed software manuals, artificial filament tow of cellulose acetate, laboratory and diagnostic equipment, wood pulp and almonds from the US. The US introduced the Nepal Trade Preference Programme after the April 2015 earthquake, granting duty-free access to 77 items to support economic recovery. However, trade experts say the preferential treatment has failed to significantly boost exports. The programme applies to 77 tariff lines: 56 textile products, ten footwear items, nine clothing goods and two fodder-related products. According to reports, as of Thursday (June 5), the average effective US tariff rate stands at 15.1 per cent, up sharply from the 2.5 per cent rate before the recent rounds of tariff increases. This rise results from ongoing trade disputes and retaliatory measures, contributing to a highly complex and volatile trade environment. Despite special provisions under multilateral trade rules, the participation of vulnerable economies in global trade remains minimal. They make up less than 0.5 per cent of total US imports and contribute insignificantly to US tariff revenue or trade deficits. According to the report, the least developed and landlocked developing countries account for only 1.3 per cent of global exports—a figure that has largely remained unchanged over the past three decades. This stagnation persists despite the Sustainable Development Goal (SDG) of significantly increasing the export share of developing countries, with a particular aim of doubling LDC exports by 2020. Instead, export growth for these nations has moved at a 'snail's pace' over the last 30 years, the report says. Though the US market is critical for the exports of these vulnerable economies, their footprint remains small. The report states that LDCs account for 8.9 per cent of total US exports and just 0.9 per cent of US imports. Similarly, LLDCs buy 2.1 per cent of US exports while supplying 0.2 per cent of imports. Regarding trade deficits, LDCs contribute 1.5 per cent to the US deficit, while LLDCs have a negative contribution of 0.2 per cent, meaning the US runs a trade surplus with them. The report emphasises that newly imposed US tariffs, which are layered and vary by the country, represent an added burden for these countries. Under new US tariffs announced between January and mid-May 2025, a ten per cent tariff has been applied across the board, excluding Canada, Mexico, and China. In 2023, the US imports from landlocked developing countries amounted to US$6.2 billion. Of this, 59 per cent of goods were subject to country-specific tariffs, while 41 per cent enjoyed exemptions. Imports from least developed countries stood at US$27.4 billion, with 93 per cent falling under country-specific tariffs and only seven per cent exempt. The exemptions mainly apply to primary goods such as vegetable products, footwear, foodstuffs, and headgear. The report warns that LDCs will bear the brunt of these new tariff policies. The trade-weighted average tariff the US applies to imports from LDCs is 43.9 per cent—far higher than the 7.3 per cent tariff those countries impose on US exports. For LLDCs, the US applies an average tariff of 17.1 per cent, compared to a 5.2 per cent tariff on US exports. The report concludes that shrinking preferential tariff margins threaten to erode export viability for dozens of vulnerable countries, potentially setting back years of slow but hard-earned progress in trade and development. - The Kathmandu Post/ANN

Billion-dollar battery plant pauses construction in US amid electric vehicle, tariff uncertainty

The Sun

3 hours ago

The Sun

Billion-dollar battery plant pauses construction in US amid electric vehicle, tariff uncertainty

NEW YORK: A Japanese company has halted construction on a US$1.6 billion factory in South Carolina to help make batteries for electric BMWs, citing 'policy and market uncertainty,' reported Xinhua quoting the Associated Press. 'While Automotive Energy Supply Corp. (AESC) didn't specify what those problems are, South Carolina's Republican governor said the company is dealing with the potential loss of federal tax breaks for electric vehicle buyers and incentives for EV businesses as well as tariff uncertainties from President Donald Trump's administration,' noted the report. 'What we're doing is urging caution -- let things play out because all of these changes are taking place,' Governor Henry McMaster said. AESC announced the suspension in construction of its plant in Florence on Thursday. 'Due to policy and market uncertainty, we are pausing construction at our South Carolina facility at this time,' the company's statement said. AESC promised to restart construction, although it didn't say when, and vowed to meet its commitment to hire 1,600 workers and invest US$1.6 billion. The company said it has already invested US$1 billion in the Florence plant. The battery maker based in Japan also has facilities in China, the United Kingdom, France, Spain and Germany. In the United States, AESC has a plant in Tennessee and is building one in Kentucky. The statement didn't mention any changes with other plants.