AP Business Writer, Matt Ott
WASHINGTON (AP) — U.S. unemployment benefits submissions rose to their highest level in eight months last week, but remained historically low despite growing uncertainty about how tariffs will affect the wider economy.
The Labor Bureau said Thursday that new applications for unemployment benefits increased from 8,000 to 247,000 for the week that ends May 31. It has been the most common since early October. Analysts were forecasting 237,000 new applications.
The weekly application of unemployment benefits is considered representative of US layoffs, and has almost bounced back in the 200,000 to 250,000 range in a historically healthy range since Covid-19 adjusted the economy five years ago.
When reporting latest revenue, many companies often cite the eye-opening developments of President Donald Trump’s tariff announcements either lower expectations for sales and profits in 2025.
Trump has suspended or dialed many of his tariff threats, but concerns remain that a tariff-induced global economic slowdown could overturn what had been a robust US labor market.
In early May, 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 the tariffs have weakened consumer and business sentiment.
Earlier this week, the government reported an unexpected rise in US job openings in April, but other data suggested that Americans were not optimistic about the labor market.
Reports Tuesday showed that the number of Americans leaving their jobs — signs of confidence in the outlook — fell, showing higher layoffs. Another indication is that the employment market has cooled down from the 2021-2023 employment boom, and the Ministry of Labor reported the job of one of all unemployed people. In December 2022, there were two vacant seats for all unemployed Americans recently.
The Labor Bureau’s more comprehensive monthly employment report was released Friday, with analysts expecting to add 130,000 jobs in May from 177,000 in April.
The government estimates that the US economy contracted at a rate of 0.2% per year in the first quarter of 2025, a slight upgrade from the initial estimate. A surge in imports slowed growth as American companies tried to bring in foreign goods before Trump’s massive tariffs came into effect.
Trump is trying to rebuild the global economy by dramatically increasing import taxes to rejuvenate the US manufacturing sector. The president has also sought to significantly reduce the federal workforce, but many of these cuts have been challenged by courts and Congress.
In a regulatory submission early Thursday, packaged consumer goods company Procter & Gamble said it expects to cut 7,000 jobs (about 15% of the non-manufactured workforce) as part of its two-year restructuring plan.
Other companies that announced jobs this year include Workday, Dow, CNN, Starbucks, Southwest Airlines, Microsoft and Facebook parent company Meta.
The four-week average for unemployed people has increased the most since late October, eliminating some of the weekly turnover during more volatile stretches.
The total number of Americans who received unemployment benefits for the week of May 24th went from 3,000 to 1.9 million.
Original issue: June 5th, 2025, 8:55am EDT
