US weekly jobless claims increase moderately as layoffs remain low

The number of Americans filing new applications for unemployment benefits rose marginally last week, suggesting the labor market remains resilient despite darkening clouds over the economy caused by tariffs on imported goods. 

Initial claims for state unemployment benefits increased 6,000 to a seasonally adjusted 222,000 for the week ended April 19, the Labor Department said on Thursday. Economists polled by Reuters had forecast 222,000 claims for the latest week. 

The data included the Good Friday holiday, which was later this year compared to 2024. Claims tend to be volatile around moving holidays. They could also have been influenced by spring breaks which occur at different times across the states. 

Economists expect President Donald Trump's often erratic trade policy will at some point this year weaken the labor market.  Business confidence has deteriorated and financial conditions have tightened, leaving companies reluctant to hire more workers. 

Since the "Liberation Day" tariffs announcement early this month, Trump has delayed reciprocal duties on more than 50 trade partners by 90 days, while raising tariffs on Chinese imports to 145 per cent. Beijing retaliated with duties of its own, unleashing a trade war between the two economic giants. 

Trump maintained a 10 per cent universal tariff on nearly all trading partners as well as 25 per cent duties on automobiles, steel and aluminum. The tariffs, which Trump sees as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining US industrial base, have stoked fears of high inflation and stagnation in economic growth. 

The Federal Reserve's Beige Book report on Wednesday showed "several districts reported that firms were taking a wait-and-see approach to employment, pausing or slowing hiring until there is more clarity on economic conditions."  It added there were "scattered reports of firms preparing for layoffs" and "notable" decreases in government employment "or at organizations receiving government funding." The Trump administration is in the midst of an unprecedented campaign to shrink the federal government through mass firings and deep spending cuts. The often chaotic layoffs, driven by billionaire tech Elon Mask's Department of Government Efficiency, have so far not impacted the broader labor market. 

Low layoffs are anchoring the labor market and keeping the economic expansion on track. 

The number of people receiving benefits after an initial week of aid, a proxy for hiring, dropped 37,000 to a seasonally adjusted 1.841 million during the week ending April 12, the claims report showed. 

The so-called continuing claims data covered the period during which the government surveyed households for April's unemployment rate. The unemployment rate is currently at 4.2 per cent, having risen from 4.0 per cent in January.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)