It was the first time in seven weeks that benefit applications rose, although layoffs remain at historically low levels.
Weekly applications for jobless benefits are seen as representative of U.S. layoffs and have mostly settled in a historically healthy range between 200,000 and 250,000 since COVID-19 throttled the economy in the spring of 2020, wiping out millions of jobs.Earlier in July, the Labor Department reported that U.S. employers added a surprisingly strong 147,000 jobs in June, adding to evidence that the American labor market continues to show resilience despite uncertainty over President Donald Trump’s economic policies. The job gains were much more than expected and the unemployment rate ticked down 4.1% from 4.2% in May.
The government issues its July jobs report on Friday. Though the top line numbers reflect a broadly healthy labor market 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. If consumers continue to pull back on spending, a decline in demand could push businesses to freeze hiring or cut staff. This week, government data showed that employers posted 7.4 million job vacancies in June, down from 7.7 million in May. The number of people quitting their jobs – a sign of confidence in their prospects elsewhere – fell in June to the lowest level since December. Hiring also fell from May.
The deadline on most of Trump’s stiff proposed taxes on imports were extended again until Friday, though some deals have been made and other deadlines to negotiate have been extended. Unless Trump reaches deals with countries to lower the tariffs, economists fear they could act as a drag on the economy and spark another rise in inflation.
Companies that have announced job cuts this year include Procter & Gamble, Dow, CNN, Starbucks, Southwest Airlines, Microsoft, Google and Facebook parent company Meta. Most recently, Intel and The Walt Disney Co. announced staff reductions.
The Labor Department’s report Thursday also said that the four-week average of claims, which evens out some of the week-to-week fluctuations, fell by 3,500 to 221,000.
The total number of Americans collecting unemployment benefits for the previous week of July 19 was unchanged at 1.95 million.
