US Jobless Claims Drop, Labor Market Still Resilient/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. unemployment claims dropped slightly to 245,000 last week, indicating ongoing labor market strength. Claims remain at the higher end of a healthy range, signaling a potential slowdown in job growth. Experts cite trade tariffs and past rate hikes as key factors affecting employer decisions and economic momentum.
US Weekly Unemployment Claims Dip + Quick Look
- Jobless applications fell to 245,000 last week, signaling continued strength in the labor market.
- The four-week moving average rose slightly to 245,500, its highest level since August 2023.
- Continuing claims dropped to 1.95 million, reflecting low layoffs.
- Job growth slowed in 2025: roughly 124,000 jobs added per month vs. 168,000 in 2024.
- Interest rate hikes and trade uncertainty tied to tariffs weigh on business confidence.
- Fed expected to hold interest rates steady after cautious Mid‑June meeting.
Deep Dive: Unemployment Claims Stay Low, Job Market Falters, Trade Turmoil Looms
Week-over-week dip
Unemployment claims declined to 245,000 last week, down from 250,000 the previous week—better than the forecasted 250,000 from economists . Historically, weekly claims between 200,000 and 250,000 indicate a stable job market. Despite the decrease, claims have lingered near the top of that band in recent weeks.
Smoothing volatility
The four-week moving average, a more stable indicator, edged up to 245,500—its highest since August 2023. While still low by historical standards, the uptick hints at a modest slowdown in job stability .
Continuing claims decline
The number of individuals collecting unemployment benefits fell to 1.95 million for the week ending June 7. That metric continues to affirm that layoffs remain limited despite rising weekly claims .
Employment growth cooling
So far in 2025, U.S. employers have added an average of just 124,000 jobs per month—well down from 168,000 monthly in 2024, and a steep drop from the nearly 400,000 in 2021–2023 following the post-COVID rebound .
Why hiring is slowing
The slowdown reflects two primary factors:
- Federal Reserve’s rate hikes: Eleven interest rate increases during 2022–2023 have cooled off hiring by raising borrowing costs for businesses .
- Tariff-driven uncertainty: Trump’s 10% global import tax has shaken business confidence—raising costs, squeezing profits, and making firms cautious in staffing decisions .
Economist’s perspective
Carl Weinberg from High Frequency Economics notes that firms may be “hoarding” workers to avoid losing skilled employees amid high uncertainty but warns that elevated claims suggest more layoffs could be ahead as confidence wavers .
Fed’s cautious stance
Despite three rate cuts in late 2024, the Fed is taking a careful stance in 2025 due to inflation risks tied to tariffs. With inflation gradually cooling, markets expect no rate change by the end of this two-day policy meeting .
Why it matters
- For consumers: Job stability supports earnings and spending, key drivers of economic growth.
- For businesses: If layoffs gradually increase, consumer demand may soften down the line.
- For policymakers: Strong labor data gives the Fed room to pause, but trade uncertainties—tariffs and geopolitical tensions—could re-inflame prices, complicating decisions on rate cuts.
You must Register or Login to post a comment.