The number of Americans applying for unemployment benefits fell slightly last week to 245,000, according to new data from the Labor Department released Wednesday. This is a minor drop from the 250,000 claims reported the previous week, and while still relatively low by historical standards, the figure remains near the upper end of the typical range.
Economists had expected the number of new jobless claims to remain unchanged from the prior week, at 250,000. The four-week moving average, which provides a steadier look by reducing short-term fluctuations, rose to 245,500 — the highest level seen since August 2023.
Meanwhile, the total number of people receiving unemployment benefits for the week ending June 7 decreased slightly to 1.95 million.
Unemployment claims are often seen as an early indicator of layoffs and overall labor market health. Since the U.S. economy bounced back from the sharp recession caused by the COVID-19 pandemic in 2020, claims have mostly stayed within a stable range of 200,000 to 250,000. However, in recent weeks, numbers have hovered closer to the higher end of that spectrum, reinforcing concerns that the job market is gradually losing momentum.
So far in 2025, job growth has slowed significantly, with employers adding an average of 124,000 jobs per month — a notable decline from the 168,000 average in 2024 and well below the nearly 400,000 monthly average seen from 2021 through 2023.
This slowdown in hiring is believed to be influenced by a combination of factors, including the lasting effects of 11 interest rate hikes by the Federal Reserve during 2022 and 2023. Additionally, former President Donald Trump’s aggressive tariff policies — which include 10% duties on imports from nearly every country — have added further pressure on the economy. These measures are causing hesitation among businesses and concern among consumers over potential price increases.
Economist Carl Weinberg of High Frequency Economics observed that unemployment claims are still higher than in recent years, even though overall employment remains historically strong. He suggested that companies may have been holding onto skilled workers out of caution, fearing they might struggle to rehire trained talent. However, he noted that with persistent economic uncertainty, attitudes toward layoffs might be starting to shift.
Although the Federal Reserve made three interest rate cuts last year as inflation eased, it has adopted a more cautious stance in 2025. The central bank is now concerned that the reintroduction of tariffs under Trump could reignite inflation. As it concludes its current two-day meeting, the Fed is expected to keep interest rates steady.
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