US applications for jobless benefits hold firm as layoffs remain low
despite tariff uncertainty
[May 16, 2025] By
MATT OTT
WASHINGTON (AP) — U.S. applications for jobless benefits held steady
last week as layoffs remain low despite uncertainty over how President
Donald Trump’s tariffs will impact the economy.
The number of Americans applying for unemployment aid was unchanged at
229,000 for the week ending May 10, the Labor Department said Thursday.
That’s in line with the 230,000 new applications analysts forecast.
Weekly applications for jobless benefits are seen as representative of
U.S. layoffs and have mostly bounced around a 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 Trump has paused or rolled back 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.
Last week, the Federal Reserve held its benchmark lending rate at 4.3%
for the third straight meeting after cutting it three straight times 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.
Also on Thursday, the government reported that inflation at the
wholesale level fell unexpectedly in April for the first time in more
than a year. However, new retail sales data showed that Americans pulled
back their spending in April after stocking up on goods the month before
to get ahead of expected price increases due to tariffs.
On Monday, the U.S. and China 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 U.S. economy.
Trump is attempting to reshape the global economy by dramatically
increasing import taxes to rejuvenate the U.S. manufacturing sector.
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 U.S. tried to bring in foreign goods before
Trump’s massive tariffs went into effect.
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A hiring sign is displayed at a grocery store in Northbrook,
Ill., Tuesday, Jan. 21, 2025. (AP Photo/Nam Y. Huh)
 Trump has also promised to
drastically downsize the federal government workforce, which
occupied much of the initial weeks of his second term.
It’s not clear 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. Many of the
cuts are being challenged in the courts, though 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.
Earlier this month, the government reported that U.S. employers
added a surprisingly strong 177,000 jobs in April and the
unemployment rate held at a historically healthy 4.2%.
Many economists still anticipate that a negative impact from trade
wars will materialize this year for American workers.
On Tuesday, Microsoft began laying off about 6,000 workers, nearly
3% of its workforce and its largest job cuts in more than two years
as the company spends heavily on artificial intelligence.
Other companies that have announced job cuts this year include
Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent
company Meta.
The Labor Department's report Thursday said that the four-week
average of claims, which softens some of the 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 rose by 9,000 to 1.88 million.
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