U.S. applications for jobless benefits held steady last week as layoffs remained low, despite uncertainty over how President Donald Trump’s tariffs will affect the economy.
The number of Americans applying for unemployment aid was unchanged at 229,000 for the week ending May 10, the U.S. Labor Department said Thursday. That matched analysts’ forecast of 230,000 new applications.
Weekly jobless claims are seen as a proxy for U.S. layoffs and have mostly remained in a healthy range between 200,000 and 250,000 since Covid devastated the economy and eliminated millions of jobs five years ago.
While Trump has paused or rolled back many of his tariff threats, concerns persist about a global economic slowdown that could undermine the U.S. labour market — a pillar of economic strength in recent years.
Last week, the Federal Reserve held its benchmark lending rate at 4.3% for the third consecutive meeting, after cutting it three times late last year.
Fed chair Jerome Powell said the risks of both higher unemployment and inflation have risen — an unusual combination that complicates the central bank’s dual mandate to control prices and keep joblessness low.
Powell said tariffs have weighed on consumer and business sentiment, though data has yet to show significant harm to the broader economy.
Also Thursday, the government reported that wholesale inflation fell unexpectedly in April — the first decline in more than a year. However, retail sales data showed Americans pulled back spending in April after stockpiling goods the previous month to avoid expected tariff-driven price hikes.
On Monday, the U.S. and China agreed to a 90-day pause in their trade war, boosting financial markets and temporarily easing concerns about the impact of tariffs on the U.S. economy.
Trump is attempting to reshape the global economy by increasing import taxes in an effort to revive the U.S. manufacturing sector.
The economy shrank at a 0.3% annual pace from January through March as trade disruptions began to weigh on business. Growth in the first quarter slowed due to a surge in imports as companies rushed to bring in goods ahead of Trump’s tariffs.
Trump has also pledged to drastically reduce the federal government workforce, a promise that has dominated the early weeks of his second term.
It’s unclear when the job cuts ordered by the Department of Government Efficiency — or DOGE, led by Tesla CEO Elon Musk — will show up in layoffs data. Many cuts are being challenged in court, though impacts are already being felt beyond the Washington, D.C., area.
Despite some signs of weakness over the past year, the U.S. labour market remains resilient, with plentiful jobs and relatively few layoffs.
Earlier this month, the government reported that U.S. employers added a stronger-than-expected 177,000 jobs in April, with the unemployment rate holding at 4.2%.
Still, many economists anticipate the labour market will begin to feel the effects of trade tensions this year.
On Tuesday, Microsoft began laying off about 6,000 workers — nearly 3% of its workforce — in its largest round of job cuts in more than two years as it ramps up investment in artificial intelligence.
Other companies announcing layoffs this year include Workday, Dow, CNN, Starbucks, Southwest Airlines and Meta Platforms Inc., the parent company of Facebook.
The U.S. Labor Department also said Thursday that the four-week average of jobless claims, which smooths week-to-week fluctuations, rose by 3,250 to 230,500.
The total number of Americans receiving unemployment benefits for the week of May 3 increased by 9,000 to 1.88 million.