There are storm clouds over the U.S. labor market as jobless claims hold steady at eight-month highs.
According to AP News, data from the Labor Department reveals no change in jobless benefit claims, persistently at 248,000 for the week ending June 7. Concern is rife among analysts, triggered by the potential for increased layoffs under President Donald Trump's unstable tariff policies.
The latest figures defy analysts’ predictions of a slight decline to 244,000 claims. This situation marks a culmination from early October, mirroring the highest numbers encountered since that time.
Since the pandemic, claims have typically oscillated between 200,000 and 250,000 weekly. However, recent weeks have consistently seen figures at the higher end, stoking fears.
Contributing to these fears are corporate recalibrations regarding sales and profits for 2025, directly attributing adjustments to tariff changes introduced by President Trump.
The unpredictable nature of these tariffs sparks concerns over a looming global economic deceleration. Indeed, Federal Reserve Chair Jerome Powell has acknowledged threats to both employment levels and inflation due to these tariffs.
In alignment with such concerns, May saw the Federal Reserve keep its pivotal interest rate static at 4.3%. Yet despite this stability, broader economic signals are mixed.
U.S. employers managed to expand payrolls by 139,000 jobs that month. Nevertheless, an undercurrent of uncertainty from ongoing trade tensions dampens this growth.
While job openings unexpectedly rose in April, the signals are contradictory. There has been a noticeable decline in the number of Americans confidently quitting jobs for better opportunities, alongside a modest rise in layoffs.
From a broader perspective, for each unemployed individual, there was exactly one available job in April. This is a stark contrast to December 2022, when there were twice as many vacancies for job seekers.
First-quarter economic growth in 2025 contracted by 0.2% annually, driven by a rush to beat Trump's tariff deadlines. President Trump's intention to reshape the economic landscape aims to invigorate the American manufacturing sector by imposing heavier taxes on imports.
Such ambitions have also led to efforts to shrink federal workforce numbers, but these face substantial legal and legislative hurdles.
Navy Federal Credit Union's chief economist, Heather Long, emphasizes the labor market’s fragility, identifying early warning signs. A further deterioration of layoffs during the summer could stoke recession fears and suppress consumer spending.
In tandem, Powell highlighted tariffs as a damper on both consumer and business moods, adding weight to concerns over the labor market's resilience.