U.S. applications for jobless benefits jumped to their highest level in two months, but layoffs remain in a historically healthy range despite increasing fears of a tariff-induced economic slowdown.
Jobless claim applications jumped by 18,000 to 241,000 for the week ending April 26, the Labor Department said Thursday. That's more than the 225,000 new applications analysts forecast and the most since late February.
Weekly applications for jobless benefits are considered a proxy for layoffs, and have mostly stayed in a healthy range between 200,000 and 250,000 for the past few years.
The total number of Americans receiving unemployment benefits for the week of April 19 climbed to 1.92 million, the most since November of 2021.
Even though President Donald Trump has paused or pulled back on many of his tariff threats, concerns remain about a global economic slowdown that could upend what has been an historically resilient labor market.
According to the Commerce Department, contraction has already begun in the U.S.
Commerce reported Wednesday that the U.S. economy shrank at a 0.3% annual pace from January through March as Trump's trade wars disrupted business. First-quarter growth was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before Trump imposed massive tariffs.
It was the first quarterly GDP decline in three years.
Like his pledge to institute tariffs, Trump's promise to drastically downsize the federal government workforce has occupied much of the early weeks of his presidency and is still in motion.
It's not clear when the job cuts ordered by the Department of Government Efficiency -- or "DOGE," spearheaded by Elon Musk -- will surface in the weekly layoffs data. However, the federal government staff reductions are already being felt, even outside of the Washington, D.C. area.
Federal agencies that have either announced layoffs or are planning cuts include the Department of Health and Human Services, IRS, Small Business Administration, Veterans Affairs and Department of Education.
Despite showing some signs of weakening during the past year, the labor market remains healthy with plenty of job openings and relatively few layoffs.
Earlier this month, the government reported that U.S. employers added a surprisingly strong 228,000 jobs in March. While the unemployment rate inched up to 4.2%, that's still a healthy figure by historical standards.
The Labor Department issues its April jobs report on Friday.
Some high-profile companies have announced job cuts already this year, including Workday, Dow, CNN, Starbucks, Southwest Airlines and Facebook parent company Meta.
The Labor Department also reported Thursday that the four-week average of applications, which softens some of the week-to-week volatility, rose by 5,500 to 226,000.
