The number of Americans applying for unemployment benefits rose to 247,000 last week, reaching the highest level since October, according to data released Thursday by the US Department of Labor.
Despite the uptick, jobless claims remain within a historically low range and are not yet signaling widespread layoffs across the economy.
The 8,000 increase from the previous week brought claims above the 237,000 forecast by economists, reflecting a modest but notable rise in applications. Weekly jobless claims are widely regarded as a key indicator of layoffs and the broader health of the labor market.
While the latest figure points to some cooling in the job market, analysts caution that weekly claims are often volatile—particularly around holidays like Memorial Day, which was included in the reporting period ending May 31. The four-week moving average, which helps smooth out such fluctuations, also rose by 4,500 to 235,000, marking its highest level since late October.
Continuing claims, which represent the number of people actively receiving unemployment benefits, declined slightly by 3,000 to 1.9 million for the week ending May 24. Although that figure remains elevated compared to last year, it suggests that the overall number of job seekers has not surged significantly.
Economic uncertainty—driven in part by US trade policy—continues to weigh on business confidence. President Donald Trump’s tariff policies, aimed at reshaping global trade and revitalizing domestic manufacturing, have led many companies to lower or withhold financial guidance for 2025. Several large employers, including Procter & Gamble, Microsoft, and Starbucks, have recently announced job cuts amid rising costs and shifting consumer demand.
In a separate report Thursday, outplacement firm Challenger, Gray & Christmas said that US employers announced nearly 94,000 job cuts in May. While down from April, the figure remains high by historical standards, with the services and retail sectors experiencing the largest reductions.
“Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies’ workforce,” said Andrew Challenger, senior vice president of the firm.
Federal Reserve Chair Jerome Powell acknowledged this week that the US economy faces the unusual combination of elevated inflation and unemployment risk. The central bank has kept its benchmark interest rate steady at 4.3% following a series of rate cuts late last year, as policymakers await clearer signals on economic momentum.
Recent data also point to a slowdown in labor market confidence. Fewer Americans are voluntarily leaving their jobs—a trend typically seen when workers feel less secure about finding better opportunities. Meanwhile, job openings remain at one per unemployed person, a notable decline from the two-to-one ratio observed in 2022.
The Labor Department is set to release its monthly employment report on Friday, with economists expecting a gain of 130,000 jobs in May, down from 177,000 in April. The unemployment rate is projected to hold steady at 4.2%.
The Associated Press and Bloomberg contributed to this report.
