New applications for U.S. unemployment benefits declined last week, maintaining a historically low level. The Labor Department reported Thursday that initial jobless claims for the week ending July 5 dropped by 5,000 to 227,000, beating analysts’ forecasts of 238,000. The four-week moving average, which smooths out weekly fluctuations, also fell to 235,500.
This report adds to recent signs of a resilient U.S. labor market. In June, employers added a surprising 147,000 jobs, while the unemployment rate edged down to 4.1% from 4.2% in May, defying predictions of an increase to 4.3%.
Despite these positive indicators, underlying economic pressures persist, particularly concerning President Donald Trump’s trade policies. Economists express concern that aggressive tariffs could hinder economic efficiency, increase costs for businesses and consumers, and provoke retaliatory measures from other nations. With a deadline for significant proposed import taxes extended to August 1, fears remain that failure to secure new trade agreements could slow the economy and contribute to inflation.
This economic uncertainty is reflected in recent workforce reductions at several major companies. Notable layoff announcements this year have come from industry leaders such as Procter & Gamble, Dow, Starbucks, Southwest Airlines, and Meta. More recently, Microsoft announced plans to cut 9,000 jobs in its second major layoff this year, while Google initiated a new round of cost-cutting through employee buyouts in June.
While new claims are falling, Thursday’s report also revealed a rise in the total number of Americans receiving unemployment aid. For the week ending June 28, the number of continuing claims increased by 10,000 to 1.97 million, marking the highest level since November 2021.
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