US applications for jobless benefits surged to their highest level in eight months last week, reaching 247,000 new claims, according to the Labor Department. This is a significant increase from the previous week’s forecast of 237,000 and surpasses the previous record since early October.
Despite this rise, unemployment benefit claims remain historically low, ranging between 200,000 and 250,000 since the COVID-19 pandemic disrupted the economy in 2020. The current surge in applications is largely attributed to growing uncertainty about how tariffs imposed by President Donald Trump’s administration could impact the broader economy.
Many companies have lowered their sales and profit expectations for 2025 or stopped issuing guidance altogether, citing the tariff announcements. This has raised concerns that a global economic slowdown caused by tariffs could disrupt the robust US labor market.
The Federal Reserve held its benchmark lending rate steady at 4.3% last month, but Fed chair Jerome Powell warned of potential elevated unemployment and inflation rates. Tariffs have also dampened consumer and business sentiment.
Recent data shows that Americans are becoming less optimistic about the labor market, with a decrease in job quits and an increase in layoffs. The Labor Department reported one job for every unemployed person, down from two vacancies per jobless American in December 2022.
The government’s monthly employment report is expected to show US employers added 130,000 jobs in May, down from 177,000 in April. The economy has been impacted by a surge in imports due to increased tariffs, leading to a slowdown in growth.
Source: https://www.pbs.org/newshour/politics/more-americans-applied-for-jobless-benefits-last-week-rising-to-highest-level-in-eight-months