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The
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 that analysts forecast. Applications for unemployment
aid are viewed as representative of layoffs.
Last week, the Labor Department reported that U.S. employers
added a surprising 147,000 jobs in June, yet another sign that
the American labor market continues to show resilience despite
uncertainty over President Donald Trump’s economic policies. The
job gains were much bigger than expected and the unemployment
rate ticked down 4.1% from 4.2% in May. Analysts had forecast
that unemployment would rise to 4.3%.
Though the job market is broadly healthy by historical
standards, some weakness has surfaced as employers contend with
fallout from Trump’s policies, especially his aggressive
tariffs, which raise prices for businesses and consumers. Most
economists believe they make the economy less efficient by
reducing competition. They also invite retaliatory tariffs from
other countries, hurting U.S. exporters and potentially driving
businesses to freeze hiring or cut staff.
The deadline on most of Trump’s stiff proposed taxes on imports
were extended again until Aug. 1. Unless Trump reaches deals
with other countries to lower the tariffs, economists fear they
could act as a drag on the economy and trigger another bout of
inflation.
Companies that have announced job cuts this year include Procter
& Gamble, Workday, Dow, CNN, Starbucks, Southwest Airlines, and
Facebook parent company Meta.
Last week, Microsoft announced that it is laying off about 9,000
workers, its second mass layoff in months and its largest in
more than two years.
In June, Google confirmed that it had offered buyouts to another
swath of its workforce in a fresh round of cost-cutting.
The Labor Department's report also said that the four-week
average of claims, which evens out some of the weekly
volatility, fell by 5,750 to 235,500.
The total number of Americans collecting unemployment benefits
for the week of June 28 rose by 10,000 to 1.97 million. That’s
the most since November of 2021.
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