More Americans sought unemployment benefits last week, but layoffs remain low despite economic uncertainty caused by the Iran war.
The Labor Department reported Thursday that jobless claims were up to 215,000, up from 210,000 the week before. The four-week moving average of claims, which smooths out week-to-week volatility, rose by nearly 6,300 to 209,000.
“Initial claims are still impressively low, near historic lows,” Carl Weinberg, chief economist at High Frequency Economics, wrote in a commentary. “The uptick from last week to this week is trivial in a labor market of 159 million workers.″
The number of Americans signing up for unemployment benefits — a proxy for layoffs — has stabilized in a low range of mostly 200,000 to 250,000 a week since the U.S. economy emerged from a brief but nasty pandemic recession in 2020.
The total number of people collecting jobless aid rose by 15,000 to 1.79 million the week that ended May 16.
The persistently low number of claims suggests that most U.S. companies have not resorted to layoffs. But even if they’re not cutting jobs, employers haven’t been adding many either. Last year, companies, nonprofits and government agencies added fewer than 10,000 jobs a month, weakest hiring outside recession years since 2002.
Job creation has picked up a bit so far this year – to an average of 76,000 a month from January through April. By contrast, employers added 122,000 a month in 2024 and averaged nearly 400,000 a month from 2021 through 2023 as the economy roared back from COVID-19 lockdowns.
But the United States now needs fewer jobs to keep the unemployment rate from rising. President Trump’s immigration crackdown and ongoing Baby Boomer retirements means that the monthly “break-even rate″ of monthly hiring may be as low as zero. And the unemployment rate — 4.3% in April — has, in fact, remained low by historic standards.
The Iran war has clouded the economic outlook as higher energy prices squeeze consumers and businesses. Iran responded to U.S. and Israeli attacks by turning to economic warfare – closing the Strait of Hormuz, through which a fifth of the world’s oil passes, and causing the biggest disruption of global oil supplies in history. In response, U.S. gasoline prices have surged to an average of $4.43 a gallon from an average $2.98 a gallon on the eve of the conflict, according to AAA.
