The number of Americans applying for first-time unemployment benefits rose last week, signaling that economic uncertainty—particularly surrounding the Trump administration’s tariff-driven trade policies—is beginning to impact the labor market.
For the week ending May 31, seasonally adjusted jobless claims increased to 247,000, up from a revised 239,000 the previous week. This figure exceeded economist forecasts of 236,000. The earlier preliminary reading had been 240,000.
The four-week moving average, a more stable measure that smooths out week-to-week fluctuations, climbed to 235,000, up from 230,500 previously—suggesting a broader trend of labor market softening.
This uptick in claims adds to a string of recent indicators showing labor market weakness, as businesses navigate uncertainty over U.S. tariff policy. A report from ADP, a payroll processing firm, revealed that private-sector job growth in May fell short of expectations. Meanwhile, while job openings rose in April, layoffs also ticked up—hinting at easing demand for workers.
These developments come just ahead of Friday’s nonfarm payrolls report, a closely watched gauge of employment health, which is projected to show the addition of 130,000 jobs in May.
Economists have cautioned that President Trump’s higher tariffs may drive inflation and hamper economic growth. Many companies have expressed concern that the lack of clarity around the long-term impact of tariffs is making it difficult to plan future investments.
That sentiment was echoed in the Federal Reserve’s latest Beige Book, released Wednesday, which described a slowdown in economic activity. It noted that increased tariffs have contributed to rising input costs and overall price pressures since the Fed’s last policy meeting.
The Fed has held interest rates steady in the 4.25% to 4.50% range since December, and is widely expected to keep rates unchanged for the next few months as it monitors the effects of Trump’s trade and economic policies on inflation and employment.
President Trump has expressed frustration with the Fed’s approach, again urging Chair Jerome Powell to cut rates. In a post on Wednesday, Trump wrote:
“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”
Earlier Thursday, the European Central Bank cut its deposit rate by 25 basis points to 2.0%, marking its eighth cut in just over a year.
