The number of Americans applying for unemployment benefits edged down to 245,000 last week, according to new data from the Labor Department released Wednesday, suggesting that while the job market remains historically strong, signs of a gradual slowdown are emerging, the Associated Press reports.
Jobless claims fell modestly from the previous week’s total of 250,000, defying economists’ expectations that filings would remain steady. The four-week moving average, a metric used to smooth out short-term fluctuations, rose to 245,500—its highest level since August 2023.
Meanwhile, continuing claims, which reflect the number of people still receiving unemployment benefits, declined slightly to 1.95 million for the week ending June 7.
Unemployment claims, a key indicator of layoffs, have largely stayed within a stable range of 200,000 to 250,000 since the economy rebounded from the COVID-19 recession. That range is considered consistent with a healthy labor market. However, the recent trend toward the higher end of this band points to a labor market that may be gradually losing momentum.
Employers have added an average of 124,000 jobs per month in 2025—moderate growth, but down from 168,000 per month in 2024 and significantly below the nearly 400,000 monthly average from 2021 through 2023.
Several factors are contributing to this deceleration. Economists cite the lingering effects of 11 interest rate hikes by the Federal Reserve in 2022 and 2023, which were designed to rein in inflation. While the Fed cut rates three times in 2024, it has since adopted a more cautious stance in 2025 amid concerns that new trade tariffs could reignite inflation.
Some economists also point to trade-related uncertainty under the current administration. President Donald Trump’s broad tariff policies—including a 10% levy on most imports—have added economic strain by raising costs for businesses and consumers alike. Analysts warn that such policies could dampen investment and hiring activity if inflationary pressures resurface.
Labor market analysts are also watching employer behavior closely. Carl Weinberg, chief economist at High Frequency Economics, suggests that many companies have been “hoarding” skilled workers, reluctant to make cuts amid a still-tight labor market. However, he notes that this hesitancy may be starting to shift as economic conditions evolve.
“With uncertainty still high, companies have remained hesitant about layoffs,” Weinberg said. “That may be changing.”
The Federal Reserve, which concludes its two-day policy meeting on Wednesday, is widely expected to leave interest rates unchanged as it monitors both inflation and the labor market for further signs of economic direction.
