US weekly jobless claims increase marginally amid low layoffs

[WASHINGTON] The number of Americans filing claims for unemployment benefits increased marginally last week amid relatively low layoffs, despite the dragging war with Iran.

Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 215,000 for the week ended May 23, the Labor Department said on Thursday (May 28). Economists polled by Reuters had forecast 211,000 claims for the latest week. Claims have been tucked in a 190,000-230,000 range this year.

Outside high-profile job cuts by technology firms related to artificial intelligence, layoffs have remained generally low, despite uncertainty, first from last year’s sweeping import tariffs and now the US-Israel war with Iran. The conflict has shut off the Strait of Hormuz, boosting commodity prices, including oil and fertilisers, and driving up inflation.

The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 15,000 to a seasonally adjusted 1.786 million during the week ended May 16, the claims report showed. The so-called continuing claims covered the period during which the government surveyed households for May’s unemployment rate.

The unemployment rate is expected to have held steady at 4.3 per cent in May. Continuing claims have dropped from last year’s lofty levels, though some of the decline is likely due to people exhausting their eligibility for benefits, limited to 26 weeks in most states.

They also do not capture young unemployed Americans, who typically have no or a limited work history, disqualifying them from benefits. College graduates are entering a tough labour market. Some of last year’s graduates remain unemployed. A Conference Board survey on Tuesday showed households’ ⁠perceptions of the labour market were mixed this month, with the share viewing jobs as “plentiful” falling to the lowest level since February 2021. But the share reporting that jobs were “hard to get” hit a seven-month low. REUTERS