U.S. applications for jobless benefits jumped last week to their highest level in two months. This increase is a harbinger of potential changes in the labor market. For the week ending April 26, unemployed workers’ jobless claim applications shot up by 18,000 compared to last week, for a total of 241,000. The total number of Americans on unemployment insurance for the week ending April 19 rose to 1.92 million. Notably, this much-needed increase comes at an important inflection point.
Historically weekly applications for jobless benefits have stayed low. Realistically, they’re usually going to be in the ballpark of 200,000-250,000, healthy levels the last few years. This recent surge is alarming, given that more than a dozen well-known firms have publicly disclosed plans to cut jobs so far this year. Workday, Dow, CNN, Starbucks, Southwest Airlines and most notably Meta, the parent company of Facebook – in just the last few weeks. They’ve done this by laying the hammer down to bust their workforce.
President Donald Trump’s long-term attempts to shrink the federal government workforce still have a lasting effect on the employment landscape, even after leaving office. These cuts are hard at work not just inside the beltway but at stoplight and street corners in every state. Inflation may be moderating, but the labor market is still strong with broad-based job openings and low layoff rates. Yet the unemployment rate has only inched up to 4.2%, an unemployment rate still quite healthy by historical standards.
Economic growth almost came to a standstill in the first quarter of the year. This decline was due in large part to an increase in imports. U.S. firms rushed to import foreign goods before Trump’s expected wave of huge tariffs kicked in. This made for the first quarterly GDP decrease in three years. Nevertheless, U.S. employers added a surprising 228,000 jobs in March, demonstrating resilience in the labor market amidst growing fears of a tariff-induced economic slowdown.
Monthly layoffs still remain below what would be considered healthy levels historically. Fears of an impending global recession increase under the weight of tariff policies. Mass layoffs, some with specific numbers of affected employees, have been declared at many federal agencies. This extends to the Department of Education, Veterans Affairs, and the Small Business Administration as well.
