The number of Americans filing new claims for unemployment benefits fell last week, suggesting the economy continued to maintain a steady pace of job growth in May.
Initial claims for state unemployment benefits fell by 2,000 to a seasonally adjusted 227,000 for the week ended May 17, the Labor Department said on Thursday. Economists polled by Reuters had expected 230,000 claims for the week.
They had expected claims to remain in a high range of 205,000 to 243,000 for the rest of the year, driven largely by difficulties in adjusting data for seasonal fluctuations. This did not signal a significant change in labor market conditions.
Employers have generally remained reluctant to lay off workers despite heightened economic uncertainty stemming from President Donald Trump's volatile trade policies. However, economists expect layoffs to increase in the second half of 2025 as the government’s import tariffs begin to hurt demand, disrupt supply chains and boost inflation.
The claims data covers the period during which the government surveys companies for the nonfarm payrolls component of the May jobs report.
The U.S. economy added 177,000 jobs in April. Experts expect job growth to slow to below 100,000 a month, a pace considered in line with the expansion of the working-age population.
Next week’s data on the number of individuals still receiving benefits after the first week of claims as an indicator of hiring activity is expected to provide a clearer picture of the health of the labor market in May. The claims report showed that the number of continuing claims rose by 36,000 to 1.903 million (seasonally adjusted) for the week ended May 10.
Companies are also cautious about adding workers due to economic uncertainty related to tariffs. This has left many individuals who lost their jobs unemployed for extended periods. The median unemployment period increased to 10.4 weeks in April compared to 9.8 weeks in March.
