Associated Press Business Writer Matt Ott
WASHINGTON (AP) — U.S. applications for unemployment benefits remained stable last week as layoffs remained low despite uncertainty about how President Donald Trump’s tariffs will affect the economy.
The Labor Bureau said Thursday that the number of Americans applying for unemployment assistance was no different to 229,000 at 229,000. This is in line with forecasts from 230,000 new application analysts.
The weekly application of unemployment benefits is considered representative of US layoffs, hitting a healthy range, primarily between 200,000 and 250,000 since Covid-19 destroyed the economy and wiped out millions of jobs five years ago.
While Trump has suspended or rolled back many of his tariff threats, concerns remain about a global economic slowdown that could boost the US labor market, which has been a pillar of the US economy for many years.
Last week, the Federal Reserve held its benchmark lending rate at 4.3% in its third consecutive meeting, after three consecutive sessions at the end of last year.
Federal Reserve Chairman Jerome Powell said the risk of both higher unemployment and inflation is increasing.
Powell said tariffs have weakened consumer and business sentiment, but the data has yet to show significant harm to the economy.
Also on Thursday, the government reported that inflation at the wholesale level had unexpectedly dropped in April for the first time in more than a year. However, new retail sales data showed Americans pulling back spending in April after stocking items the previous month to preempt the expected price rise due to tariffs.
On Monday, the US and China agreed to a 90-day hiatus in the trade war, increasing to financial markets, and at least temporarily alleviated some of their fears over the impact of tariffs on the US economy.
Trump is trying to rebuild the global economy by dramatically increasing import taxes to rejuvenate the US manufacturing sector.
The US has already begun to shrink, and the economy has shrunk by 0.3% at an annual pace from January to March, as Trump’s trade war disrupts businesses. First quarter growth was slowed by a surge in imports as US companies tried to bring in foreign goods before Trump’s massive tariffs came into effect.
Trump has also pledged to significantly reduce the federal workforce, which accounted for much of the first week of his second term.
It’s not clear when the work that “Doge,” led by billionaire Tesla CEO Elon Musk, has been cut by the government’s efficiency department, will be reduced, but weekly layoff data. Federal staff cuts are already felt even outside the Washington, D.C. area, but many of the cuts are being challenged in courts.
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.
On Tuesday, Microsoft began firing around 6,000 workers. Nearly 3% of the workforce, the largest job cut in over two years, has put companies heavily on artificial intelligence.
Other companies that announced jobs this year include Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.
The Labor Department report said Thursday that the average four-week billing average, which eases some of the weekly fluctuations, has increased from 3,250 to 230,500.
The total number of Americans receiving unemployment benefits on May 3rd increased from 9,000 to 1.88 million.
Original issue: May 15th, 2025 9:25am EDT
