US filings for jobless aid, proxy for layoffs, inch down modestly last week as uncertainty lingers

Washington, May 22 (AP) The number of Americans filing unemployment claims last week fell slightly as businesses continue to retain employees despite growing economic uncertainty over US trade policy.

Applications for jobless benefits fell by 2,000 to 227,000 for the week ending May 17, the Labour Department said Thursday. That's pretty close to the 230,000 new applications analysts forecast.

Weekly applications for jobless benefits are seen as representative of US layoffs and have mostly bounced around a historically healthy range between 200,000 and 250,000 since COVID-19 ravaged the economy and wiped out millions of jobs five years ago.

Even though President Donald Trump has paused or dialled down many of his tariff threats, concerns remain about a global economic slowdown that could upend the US labour market, which has been a pillar of the American economy for years.

The US and China last week agreed to a 90-day pause in their trade war, giving financial markets a boost and at least temporarily relieving some of the anxiety over the impact of tariffs on the US economy.

Earlier this month, the Federal Reserve held its benchmark lending rate at 4.3 per cent for the third straight meeting after cutting it three times at the end of last year.

Fed chair Jerome Powell said the potential for both higher unemployment and inflation are elevated, an unusual combination that complicates the central bank's dual mandate of controlling prices and keeping unemployment low.

Powell said that tariffs have dampened consumer and business sentiment and the government recently reported that the US economy shrank at a 0.3 per cent annual pace in the first quarter of 2025. Growth was slowed by a surge in imports as companies in the US tried to bring in foreign goods before Trump's massive tariffs went into effect.

Trump is attempting to reshape the global economy by dramatically increasing import taxes to rejuvenate the US manufacturing sector.

Trump has also promised to drastically downsize the federal government workforce, but many of those cuts are being challenged in the courts and Congress.

It's not clear if or when the job cuts ordered by the Department of Government Efficiency — or “DOGE,” spearheaded by billionaire Tesla CEO Elon Musk — will surface in the weekly layoffs data.

Despite showing some signs of weakening during the past year, the labour market remains robust, with plentiful jobs and relatively few layoffs.

Earlier this month, the government reported that US employers added a surprisingly strong 177,000 jobs in April and the unemployment rate held at a historically healthy 4.2 per cent.

Many economists still anticipate that a negative impact from trade wars will materialise this year for American workers.

Microsoft last week began laying off about 6,000 workers, nearly 3 per cent of its workforce and its largest job cuts in more than two years.

Other companies that have announced job cuts this year include Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.

The Labour Department also reported Thursday that the four-week average of claims, which evens out some of the week-to-week ups and downs during more volatile stretches, rose by 1,000 to 231,500.

The total number of Americans receiving unemployment benefits for the week of May 10 climbed by 36,000 to 1.9 million. (AP) GSP

Source: PTI