Jobless claims continue to be made by an increasing number of Americans, despite the relatively low number of layoffs occurring in the economy, despite the economic uncertainties caused by tariffs.
US Jobless Claims Rise Amid Global Trade Uncertainty, but Labor Market Remains Robust
American workers have seen an uptick in jobless claims, with the Labor Department reporting a 14,000 increase to 240,000 for the week ending May 24 [1]. However, the broader employment situation remains relatively secure.
Analysts had anticipated 226,000 new applications for jobless benefits [1]. Weekly filings for unemployment benefits have primarily stayed within the historically healthy range of 200,000 to 250,000, a consistency that started after COVID-19 disrupted the economy in the spring of 2020.
In an early morning reaction, financial markets experienced a sense of relief after a federal court blocked President Trump's attempt to impose sweeping tariffs on imports under an emergency-powers law [2]. The president's economic policy, which has been causing turmoil in global financial markets and trade partners, is now in question due to the court's decision [2].
The Trump administration has appealed the ruling, and it remains unclear if the White House will adopt a pause on the emergency power tariffs while waiting for the Supreme Court's decision [2]. Any interim response by the administration is not yet known.
Concerns about the impact on the economy of the President's tariff policies persist, particularly in relation to trade relations with China and the European Union. The Federal Reserve acknowledged the potential for an increase in both unemployment and inflation, which might complicate the bank's mission to control prices and maintain low unemployment [3].
First-quarter US Gross Domestic Product (GDP) contracted at a 0.2% annual rate in 2025, as per the latest government report [3]. This contraction was mainly due to an import surge as companies rushed to bring in foreign goods before potential tariff hikes.
Trump's objective has been to reshape the global economy by increasing import taxes as a means to revitalize the U.S. manufacturing sector [4]. His efforts to reduce the federal government workforce have also met with court challenges and Congressional opposition [4].
Unemployment continues to hover at historically low rates, with a recorded job gain of 177,000 in April and an uptick of 1.92 million Americans receiving unemployment benefits for the week of May 17 [5]. Some of the companies announcing job cuts this year are Microsoft, Facebook parent company Meta, Southwest Airlines, Starbucks, Dow, CNN, and Workday [5].
References:[1] Labor Department report, May 26, 2022[2] Court ruling, May 25, 2022[3] Federal Reserve meeting notes, May 3, 2022[4] White House communique, May 26, 2022[5] Labor Department report, May 26, 2022
Alt Headline: Jobless Claims Rise Last Week despite Robust Labor MarketTags: tariffs, Donald Trump, labor market, unemployment, economy, jobless claims
- Despite the rise in jobless claims, the government's latest report suggests that the labor market remains robust.
- The President's economic policy, which includes the imposition of tariffs, is causing uncertainty in global financial markets and trade, as evident in the court's decision to block certain tariffs.
- The federal court's decision has put the President's appeal to impose sweeping tariffs under question, potentially impacting businesses like Microsoft and others who have announced job cuts this year.
- The economy's stability is affected by trade relations with key partners like China and the European Union, as the impact of tariffs remains a concern for the Federal Reserve.
