The number of Americans filing for jobless benefits last week rises to highest level in eight months

Globe and Mail

a day ago

WASHINGTON (AP) — Filings for U.S. unemployment benefits rose to their highest level in eight months last week but remain historically low despite growing uncertainty about how tariffs could impact the broader economy.
New applications for jobless benefits rose by 8,000 to 247,000 for the week ending May 31, the Labor Department said Thursday. That's the most since early October. Analysts had forecast 237,000 new applications.
Weekly applications for jobless benefits are considered representative of U.S. layoffs and have mostly bounced around a historically healthy range between 200,000 and 250,000 since COVID-19 throttled the economy five years ago, wiping out millions of jobs.
In reporting their latest earnings, many companies have either lowered their sales and profit expectations for 2025 or not issued guidance at all, often citing President Donald Trump's dizzying rollout of tariff announcements.
Though Trump has paused or dialed down many of his tariff threats, concerns remain that a tariff-induced global economic slowdown could upend what's been a robust U.S. labor market.
In early May, the Federal Reserve held its benchmark lending rate at 4.3% for the third straight meeting after cutting it three times at the end of last year.
Fed chair Jerome Powell said the potential for both higher unemployment and inflation are elevated, an unusual combination that complicates the central bank's dual mandate of controlling prices and keeping unemployment low. Powell said that tariffs have dampened consumer and business sentiment.
Earlier this week, the government reported that U.S. job openings rose unexpectedly in April, but other data suggested that Americans are less optimistic about the labor market.
Tuesday's report showed that the number of Americans quitting their jobs — a sign of confidence in their prospects — fell, while layoffs ticked higher. And in another sign the job market has cooled from the hiring boom of 2021-2023, the Labor Department reported one job every unemployed person. As recently as December 2022, there were two vacancies for every jobless American.
The Labor Department's more comprehensive monthly employment report comes out Friday, with analysts expecting that U.S. employers added a slim 130,000 jobs in May, down from 177,000 in April.
The government has estimated that the U.S. economy shrank at a 0.2% annual pace in the first quarter of 2025, a slight upgrade from its first estimate. Growth was slowed by a surge in imports as companies in the U.S. tried to bring in foreign goods before Trump's massive tariffs went into effect.
Trump is attempting to reshape the global economy by dramatically increasing import taxes to rejuvenate the U.S. manufacturing sector. The president has also tried to drastically downsize the federal government workforce, but many of those cuts are being challenged in the courts and Congress.
In a regulatory filing early Thursday, the packaged consumer goods company Procter & Gamble said it expected to cut 7,000 jobs — about 15% of its nonmanufacturing workforce — as part of a two-year restructuring plan.
Other companies that have announced job cuts this year include Workday, Dow, CNN, Starbucks, Southwest Airlines, Microsoft and Facebook parent company Meta.
The four-week average of jobless claims, which evens out some of the week-to-week gyrations during more volatile stretches, rose by 4,500 to 235,000, the most since late October.
The total number of Americans receiving unemployment benefits for the week of May 24 inched down by 3,000 to 1.9 million.