U.S. Jobless Claims Rise as Trump Tariffs Cloud Outlook/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Jobless claims rose to 240,000 last week, signaling some labor market tension as Trump’s tariffs shake economic confidence. Despite the uptick, layoffs remain historically low and the job market stays strong. A federal court decision blocking new tariffs has eased some investor concerns — for now.
Unemployment Trends Quick Look
- New jobless claims rose by 14,000 to 240,000 (week ending May 24)
- Analysts expected a lower figure of 226,000
- Weekly claims remain within a historically healthy 200k–250k range
- Federal court blocks Trump’s emergency tariff powers — pending appeal
- Economic contraction of 0.2% in Q1 attributed to pre-tariff import surge
- Fed holds interest rate at 4.3%, flags inflation and job risk
- U.S. added 177,000 jobs in April; unemployment steady at 4.2%
- Four-week average of claims ticks down slightly to 230,750
- Continuing unemployment claims rose by 26,000 to 1.92 million
U.S. Jobless Claims Rise as Trump Tariffs Cloud Outlook
Deep Look
Jobless Claims Rise, But Labor Market Stays Resilient
Initial filings for unemployment insurance rose to 240,000 last week, up 14,000 from the prior week, according to the U.S. Department of Labor. While the number missed economists’ expectations of 226,000, it still falls within the typical post-pandemic range — a sign that American workers remain broadly secure in their jobs.
These weekly filings are a widely watched barometer of layoffs in the economy. Since the pandemic-era collapse in spring 2020, claims have largely remained between 200,000 and 250,000 — levels viewed as healthy by most economists.
Tariff Tensions Shake Markets, Then Stabilize
Relief rippled through markets Thursday after a federal court temporarily blocked President Trump’s plan to enact sweeping tariffs using emergency executive powers. The decision introduced fresh legal uncertainty for one of Trump’s cornerstone economic policies, which has already rattled global supply chains and stoked fears of inflation.
The Trump administration is appealing, with the issue likely heading to the Supreme Court. It’s unclear whether Trump will pause all tariffs in the interim, but previous threats have already been dialed back in response to market concerns.
Economy Shrinks in Q1, Imports Blamed
The U.S. economy shrank by 0.2% in the first quarter of 2025, the first contraction in three years, as businesses accelerated imports ahead of Trump’s tariff hikes. The spike in imported goods — which must be subtracted from GDP — distorted growth and signaled supply chain anxiety among American firms.
The Commerce Department’s second estimate, released Thursday, slightly upgraded the original projection but affirmed a slowdown from the 2.4% growth logged in Q4 2024.
Federal Reserve Holds Rates Amid Dual Threats
The Federal Reserve kept interest rates steady at 4.3% earlier this month, citing conflicting risks of rising inflation and increasing unemployment — a rare and difficult policy bind. Chair Jerome Powell said recent tariffs have weighed on both consumer and business sentiment, complicating the Fed’s job of maintaining price stability while supporting employment.
U.S. Employers Still Hiring Despite Slowdown
Despite the economic headwinds, the U.S. labor market remains resilient. Employers added 177,000 new jobs in April, and the unemployment rate held at 4.2%, showing that hiring has not yet significantly slowed. Sectors like hospitality, healthcare, and construction continue to show strong demand for workers.
The number of Americans receiving unemployment aid rose to 1.92 million, but the four-week average — which helps smooth out volatility — actually ticked down slightly to 230,750.
Major corporations announcing layoffs in 2025 include Microsoft, Meta, CNN, Starbucks, Dow, and Southwest Airlines, though these cuts are relatively isolated and not yet indicative of a broader downturn.
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