The number of Americans filing new claims for unemployment benefits rose more than expected last week to 225,000 for the week ended May 30. However, the overall labor market remained stable with the four-week moving average rising only slightly to 214,750.
While the tech sector has seen a surge in job cuts due to the shift to artificial intelligence (AI), the rate of layoffs has generally remained low. So far this year, weekly claims have managed to stay in a consistent range of between 190,000 and 230,000.
Based on data from the US Department of Labor and a report by firm Challenger, Gray and Christmas, employers announced 97,006 job cuts in May, a 16% jump from April, with the tech sector accounting for 39% of the total. Meanwhile, the number of workers continuing to receive benefits after the first week fell to 1.777 million.
Markets are currently facing increasing uncertainty as the US-Israeli conflict with Iran enters its fourth month. While it has not yet had a direct impact on the labor sector, the war has disrupted global commodity supply chains and pushed up energy and raw material prices.
The Federal Reserve’s Beige Book report confirmed the market is in a “low hiring, low firing” situation, with companies being more selective in filling vacancies. Investors’ attention will now turn to the May nonfarm payrolls report, which is expected to increase by 85,000 jobs with the unemployment rate remaining at 4.3%.
