US applications for jobless benefits fall last week despite elevated
uncertainty over Trump tariffs
[May 09, 2025]
By MATT OTT
WASHINGTON (AP) — The number of Americans applying for unemployment
benefits fell last week despite heightened uncertainty about how
President Donald Trump’s tariffs will impact the U.S. and global
economies.
Jobless claim applications fell by 13,000 to 228,000 for the week ending
May 3, the Labor Department said Thursday. That’s in line with the
229,000 new applications analysts forecast.
Weekly applications for jobless benefits are considered a proxy for
layoffs, and have mostly bounced around a healthy range between 200,000
and 250,000 since COVID-19 decimated the economy and wiped out millions
of jobs.
Even though Trump has paused or pulled back on many of his tariff
threats, concerns remain about a global economic slowdown that could
upend the U.S. labor market, which has been a pillar of the American
economy for years.
On Wednesday, the Federal Reserve held its benchmark lending rate at
4.3% for the third straight meeting, after cutting it three times in a
row at the end of 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 of controlling prices and keeping
unemployment low.
Powell said that tariffs have dampened consumer and business sentiment
but that data has not yet shown significant harm to the economy.
There have been trade developments this week, with the U.S. and Britain
expected to announce the framework for trade deal later Thursday.
No new deals have been reached with America’s largest trading partners,
including Canada, Mexico and China. Trump has left the highest tariffs
in place on China, heightening tensions between the world’s two largest
economies. Washington and Beijing are sending officials to Switzerland
this weekend for an initial round of trade talks.
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 Trump is attempting to reshape the
global economy by dramatically increasing import taxes to rejuvenate
the U.S. manufacturing sector.
A contraction has already begun in the U.S., where the economy
shrank at a 0.3% annual pace from January through March as Trump’s
trade wars disrupted business. First-quarter growth was slowed by a
surge in imports as companies in the United States tried to bring in
foreign goods before Trump’s massive tariffs went into effect.
It was the first quarterly GDP decline in three
years.
Like his pledge to institute tariffs, Trump’s promise to drastically
downsize the federal government workforce has occupied much of the
early weeks of his presidency and is still in motion.
It’s not clear when the job cuts ordered by the Department of
Government Efficiency — or “DOGE,” spearheaded by Elon Musk — will
surface in the weekly layoffs data. However, the federal government
staff reductions are already being felt, even outside of the
Washington, D.C. area.
Despite showing some signs of weakening during the past year, the
labor market remains robust with plentiful jobs and relatively few
layoffs.
Last week the government reported that U.S. employers added a
surprisingly strong 177,000 jobs in April. The unemployment rate
held at a historically healthy 4.2%, however, many economists
anticipate that a negative impact from trade wars will materialize
this year for American workers.
Companies that have announced job cuts this year include Workday,
Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company
Meta.
The Labor Department reported that the four-week average of claims,
which evens out some of the week-to-week gyrations, inched up by
1,000 to 227,000.
The total number of Americans receiving unemployment benefits for
the week of April 26 fell to 1.88 million, a decrease of 29,000.
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