The U.S.’s Labour Department reported Thursday that jobless claims for the week ending July 5 had fallen by 5,000 to 2,27,000 – still well below the 2,38,000 that analysts had forecast.
Applications for unemployment aid are viewed as representative of layoffs.
Last week, the Labour Department had reported that U.S. employers added a surprising 1,47,000 jobs in June, yet another sign that the American labour market continues to show resilience despite uncertainty over President Donald Trump’s economic policies.
The job gains were much bigger than expected and the unemployment rate ticked down 4.1 per cent from 4.2 per cent in May against analysts’ prediction of a rise to 4.3 per cent.
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Though the jobless claims have remained in the historically healthy range in the past couple of years, some weakness has surfaced as employers face raised prices in businesses and consumer durables after Trump put in place aggressive tariffs on imports.
With reduced competition, economy is made less efficient, feel most economists. Additionally, the tariff imposition invites retaliatory tariffs from other countries, further hurting US exporters and potentially driving businesses to freeze hiring or cut staff.
Trump has now extended the deadline for his proposed tariffs on exports to August 1. Unless he reaches deals with other countries to lower the tariffs, economists fear they could drag the economy and trigger another bout of inflation, which is why US Federal Reserve refused to cut interest rates much to the President’s chagrin.
Companies that have announced job cuts this year include Procter & Gamble, Workday, Dow, CNN, Starbucks, Southwest Airlines, and Facebook parent company Meta.
Last week, Microsoft announced that it is laying off about 9,000 workers, its second mass layoff in months and its largest in more than two years.
In June, Google confirmed that it had offered buyouts to another swath of its workforce in a fresh round of cost-cutting.
The Labour Department's report also said that the four-week average of claims, which evens out some of the weekly volatility, fell by 5,750 to 2,35,500.
The total number of Americans collecting unemployment benefits for the week of June 28 rose by 10,000 to 1.97 million. That's the most since November of 2021.
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