The number of Americans applying for unemployment benefits declined slightly last week, maintaining levels that have remained historically low since the U.S. economy recovered from the COVID-19 pandemic.
For the week ending August 9, new jobless claims fell by 3,000 to 224,000, according to Labor Department data released Thursday. This figure came in below economists’ forecast of 230,000 applications.
Weekly jobless claims are often viewed as an indicator of layoffs and have stayed within a healthy range of about 200,000 to 250,000 since the economy began rebounding in mid-2020.
Two weeks ago, a disappointing July jobs report triggered a sharp drop in financial markets and led President Donald Trump to dismiss Erika McEntarfer, head of the Bureau of Labor Statistics (BLS), which produces monthly employment data. However, the BLS does not handle the weekly jobless claims report, except for seasonal adjustments.
In July, U.S. employers added just 73,000 jobs, significantly less than the 115,000 expected by analysts. Additionally, revised data for May and June reduced previous job counts by a combined 258,000, and the unemployment rate ticked up to 4.2% from 4.1%.
Without providing evidence, Trump accused McEntarfer of manipulating employment numbers for political reasons. He nominated E.J. Antoni, chief economist at the conservative Heritage Foundation, to lead the BLS—a move that drew widespread criticism from economists across the political spectrum.
Although layoffs remain low compared to historical standards, signs of weakening in the labor market have emerged this year. It is becoming harder for many job seekers to find employment.
In June, U.S. employers posted 7.4 million job openings, down from 7.7 million in May. The number of workers quitting their jobs—a sign of confidence in securing better positions—also dropped to its lowest point since December.
Several large companies, including Procter & Gamble, Dow, CNN, Starbucks, Southwest Airlines, Microsoft, Google, Meta (Facebook’s parent company), Intel, and The Walt Disney Company, have announced layoffs in 2023.
Many economists argue that uncertainty caused by Trump’s aggressive tariffs on imports has made employers cautious about expanding their workforce. While most tariffs took effect last week, some agreements have been reached, and key negotiation deadlines, particularly with China, have been extended. Without further trade deals, these tariffs risk slowing the economy and driving inflation higher.
Supporting that concern, new government data released Thursday showed an unexpected surge in U.S. wholesale inflation last month, reflecting rising costs linked to import taxes.
The jobless claims report also noted that the four-week average of new claims—a measure that smooths weekly fluctuations—increased slightly by 750 to 221,750.
Meanwhile, the total number of Americans collecting unemployment benefits for the week ending August 2 decreased by 15,000 to 1.95 million.
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