Associated Press Business Writer Matt Ott
WASHINGTON (AP) — The number of Americans filing for unemployment claims last week fell slightly as businesses continue to retain employees despite rising economic uncertainty over US trade policy.
The Labor Department said Thursday that applications for unemployment benefits fell from 2,000 to 227,000 for the week that ends May 17th. This is pretty close to the forecasts of 230,000 new application analysts.
The weekly application of unemployment benefits is considered representative of US layoffs, and has almost bounced back to a historically healthy range ever since Covid-19 destroyed the economy and wiped out millions of jobs five years ago.
Despite President Donald Trump suspending or dialing many of his tariff threats, concerns remain about a global economic slowdown that could overturn the US labor market, which has been a pillar of the US economy for many years.
The US and China agreed to a 90-day suspension in the trade war last week, increasing to financial markets, and at least temporarily alleviated some of their fears over the impact of tariffs on the US economy.
Earlier this month, the Federal Reserve held its benchmark lending rate at 4.3% in its third consecutive meeting, after cutting three times at the end of last year.
Federal Reserve Chairman Jerome Powell said there is a growing possibility of both higher unemployment and inflation. This is an unusual combination that complicates the dual mission of managing central bank prices and keeping unemployment low.
Powell said tariffs have attenuated consumer and business sentiment, and the government recently reported that the US economy had contracted at a rate of 0.3% per year in the first quarter of 2025. A surge in imports slowed growth as US companies tried to bring in foreign goods before massive tariffs took effect.
Trump is trying to rebuild the global economy by dramatically increasing import taxes to rejuvenate the US manufacturing sector.
Trump has also pledged to significantly reduce the federal workforce, but many of these cuts have been challenged by courts and Congress.
It is not clear whether or not the work ordered by “Doge” will be surfaced with weekly layoff data, or whether or when “Doge” will cut it.
Despite showing signs of weakening over the past year, the labour market remains strong with abundant jobs and relatively few layoffs.
Earlier this month, the government reported that US employers added an incredibly strong 177,000 jobs in April, with unemployment rates added at a historically healthy 4.2%.
Many economists expect the negative effects of the trade war to come to fruition for American workers this year.
Last week, Microsoft began solving its biggest job cuts in over two years, with around 6,000 workers, nearly 3% of its workforce.
Other companies that announced jobs this year include Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.
The Labor Bureau also reported on Thursday that the four-week average billing to avoid some of the weekly ups and downs during more volatile stretches rose between 1,000 and 231,500.
The total number of Americans receiving unemployment benefits on May 10 increased between 36,000 and 1.9 million.
Original issue: May 22, 2025 8:54am EDT
