The number of Americans applying for unemployment benefits dipped to 245,000 last week, hovering at historically low levels, the U.S. Labor Department said Wednesday.
Jobless claims ticked down from 250,000 the previous week. Economists had expected claims to remain at 250,000.
The four-week average of claims, which smooths out week-to-week volatility, rose to 245,500 — the highest since August 2023.
The number of Americans collecting unemployment benefits during the week of June 7 slid to 1.95 million.
Weekly unemployment claims are a proxy for layoffs and have mostly remained within a healthy band of 200,000 to 250,000 since the economy recovered from a brief but painful Covid recession in 2020, which temporarily wiped out millions of jobs.
In recent weeks, however, claims have stayed at the high end of that range, adding to evidence that the U.S. job market is decelerating after years of strong hiring. So far this year, employers are adding a decent but far from spectacular 124,000 jobs a month — down from an average of 168,000 last year and nearly 400,000 from 2021 through 2023.
The hiring slowdown is partly the drawn-out result of 11 interest rate hikes by the Federal Reserve in 2022 and 2023. But former president Donald Trump’s aggressive and often erratic trade policies — including 10% taxes on imports from almost every country — are also weighing on the economy, paralyzing businesses and worrying consumers who fear the tariffs will drive prices higher.
Carl Weinberg of High Frequency Economics noted that claims remain elevated compared with recent years, when employment was historically tight.
“We believe firms have been ‘hoarding’ workers to ensure that they don’t lay off skilled and trained workers by mistake, especially with the labour market still very close to full employment,” Weinberg wrote. “With uncertainty still high … companies have remained hesitant about layoffs. That may be changing.”
The Fed, satisfied that inflation was coming down, cut rates three times last year. But the central bank has turned cautious in 2025, worried that Trump’s tariffs will rekindle inflationary pressures. The Fed is expected to leave rates unchanged as it wraps up a two-day meeting Wednesday.