U.S. applications for unemployment benefits fell last week, remaining within the historically healthy range of the past couple of years.
The U.S. Labor Department reported Thursday that jobless claims for the week ending July 5 fell by 5,000 to 227,000 — fewer than the 238,000 analysts had forecast. Applications for unemployment aid are considered a key indicator of layoffs.
Last week, the department also reported that U.S. employers added a surprising 147,000 jobs in June, another sign the American labour market continues to show resilience despite uncertainty surrounding President Donald Trump’s economic policies. The job gains exceeded expectations and the unemployment rate ticked down to 4.1% from 4.2% in May. Analysts had forecast unemployment would rise to 4.3%.
Though the job market remains broadly healthy by historical standards, some weakness has emerged as employers contend with the fallout from Trump’s policies — particularly his aggressive tariffs, which raise costs for businesses and consumers. Most economists believe tariffs make the economy less efficient by reducing competition. They can also provoke retaliatory measures from other countries, hurting U.S. exporters and potentially prompting businesses to freeze hiring or cut staff.
The deadline on most of Trump’s proposed import tariffs was extended again to Aug. 1. Unless he reaches agreements with other countries to reduce tariffs, economists warn the measures could drag down the economy and trigger renewed inflation.
Several major U.S. companies have announced job cuts this year, including Procter & Gamble, Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.
Last week, Microsoft said it would lay off about 9,000 workers — its second mass layoff in recent months and the largest in more than two years.
In June, Google confirmed it had offered buyouts to another segment of its workforce in a fresh round of cost-cutting.
The Labor Department also said the four-week average of jobless claims, which smooths out weekly volatility, fell by 5,750 to 235,500.
The total number of Americans collecting unemployment benefits for the week ending June 28 rose by 10,000 to 1.97 million — the most since November 2021.