US jobless claims fall, labor market shows stability amid economic uncertainty

US unemployment benefit applications fell to 228,000 for the week ending May 3, down from 241,000 the previous week, signalling labour market stability following a temporary rise linked to spring recess and the Easter holiday.On May 7, the US Federal Reserve kept its key interest rate unchanged at 4.3%, marking the third consecutive hold after three rate cuts late last year.
The number of individuals receiving unemployment benefits dropped to 1.88 million, based on Labor Department data released on Thursday.
Despite concerns that tariffs could lead to increased unemployment and inflation, the labor market remains strong, Federal Reserve Chair Jerome Powell said on Wednesday after central bankers opted to keep rates steady.Also Read: Jerome Powell says Fed will not be rushed to cut rates, outlook depends on White House

Federal Reserve Chair Jerome Powell made clear he won’t be rushed into lowering borrowing costs until there’s more certainty on the direction of trade policy, which will have to come from the White House.

With recession worries rising, some businesses have paused investment decisions due to uncertainty. However, the labor market remains resilient, with employers adding 177,000 jobs in April. Fed officials described labor market conditions as “solid,” according to their statement.

Federal Reserve Chair Jerome Powell acknowledged that consumer and business sentiment had dimmed amid erratic tariff announcements but emphasised that hard data continues to reflect a healthy economy.

Also Read: JPMorgan’s Aziz sees Fed rate cuts only in 2026, recession risk by year-end