U.S. Jobless Claims Spike, Hit Eight-Month High in May/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. jobless benefit applications rose to 247,000 last week, the highest in eight months. Analysts blame rising economic uncertainty, tariff policy, and cooling business outlooks. Despite the uptick, overall unemployment levels remain historically low.
U.S. Unemployment Spike: Quick Looks
- Highest Since October: Weekly claims rose to 247,000, an 8,000 increase from the week prior.
- Still Historically Low: Despite the rise, filings remain within the 200K–250K post-pandemic range.
- Economic Uncertainty Grows: Businesses cite Trump’s shifting tariff strategy for stalling investments and hiring.
- Fed Concerns: Chair Powell warns of simultaneous inflation and unemployment risks.
- Major Companies Cut Jobs: Procter & Gamble, Meta, Microsoft, and others announce significant layoffs.
Deep Look: Jobless Claims Hit 8-Month High Amid Economic Jitters
WASHINGTON (AP) — The number of Americans filing for unemployment benefits jumped to its highest level in eight months last week, signaling fresh turbulence in a labor market long considered one of the strongest pillars of the post-pandemic economy.
According to the Labor Department, 247,000 people filed new applications for jobless benefits in the week ending May 31, up 8,000 from the previous week and surpassing analyst expectations of 237,000. The last time claims were this high was in early October 2024.
While this increase doesn’t yet suggest a jobs crisis, it reflects mounting caution among employers, especially as economic uncertainty around President Donald Trump’s evolving tariff policy and global trade relations grows.
Tariff Policy Creates Business Anxiety
A key factor in the cautious labor market behavior is Trump’s aggressive use of tariffs to reshape international trade. While some tariffs have been scaled back recently, their unpredictable rollout has stifled business planning and investor confidence.
Many companies have either revised their 2025 forecasts downward or declined to provide forward guidance entirely, citing potential supply chain disruptions, rising import costs, and shifting global demand.
The broader fear? That a global slowdown triggered by these trade tensions could undercut domestic hiring, especially in manufacturing and trade-reliant sectors.
Federal Reserve Warnings
Adding to concerns, Federal Reserve Chair Jerome Powell has said the dual threats of higher inflation and rising unemployment are complicating the central bank’s policy decisions. After cutting interest rates three times in late 2024, the Fed has held rates steady at 4.3% for three consecutive meetings.
Powell noted that tariffs are dampening sentiment among both consumers and businesses, weakening the very confidence that once powered a vigorous U.S. recovery.
Job Market Indicators Show Softening
Earlier this week, new government data revealed that job openings rose unexpectedly in April, suggesting pockets of resilience. But deeper indicators suggest the labor market may be cooling:
- Voluntary quits — typically a sign that workers are confident in landing better jobs — fell.
- Layoffs increased, hinting at growing caution among employers.
- There is now only one job opening for every unemployed American, compared to two openings per jobless person in late 2022.
Analysts expect Friday’s official monthly employment report to show a modest 130,000 job gains in May, a slowdown from April’s 177,000 additions.
Corporate Layoffs Expand
The private sector has already started making moves. On Thursday, Procter & Gamble announced plans to cut 7,000 jobs — approximately 15% of its non-manufacturing workforce — as part of a two-year cost-cutting initiative.
The consumer goods giant joins a growing list of employers slashing headcount in 2025, including:
- Meta (Facebook)
- Microsoft
- CNN
- Starbucks
- Southwest Airlines
- Dow Inc.
- Workday
Many of these layoffs are focused on administrative or corporate roles, indicating efforts to improve margins in anticipation of a weaker economic environment.
Economic Growth Under Pressure
The government recently revised its estimate for first-quarter GDP, showing the economy shrinking at an annual rate of 0.2% — slightly better than the previous estimate, but still concerning.
The contraction was driven in part by a rush of imports as businesses stocked up ahead of expected tariffs. Ironically, that import surge helped widen the trade deficit, undermining one of Trump’s key economic goals.
Meanwhile, Trump continues to promote U.S. manufacturing revitalization through increased import taxes and federal workforce downsizing. But many of these moves are being challenged in court and slowed by congressional opposition.
Where Unemployment Stands Now
- Weekly claims: 247,000 (up 8,000 from prior week)
- 4-week average: 235,000 (highest since October)
- Continuing claims: 1.9 million (down 3,000 for the week ending May 24)
Despite the increase in claims, continuing benefits — those filed by individuals already receiving unemployment — remain steady, suggesting that while layoffs may be inching up, long-term unemployment hasn’t yet surged.
Still, economists caution that sustained increases in claims over the summer could mark a turning point for the labor market.
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