Unemployment claims have risen for the second-straight week, exceeding economists' expectations at the highest level in eight months, the Department of Labor announced on Thursday.
Initial jobless claims stood at 247,000 for the week ending on May 31, higher than the 236,000 claims that economists had been projecting. That jump caused the four-week moving average to increase by 4,500.
"New jobless claims are ticking up. The numbers are still low, but there's an upward trend. This is key to watch. The main reason the US economy has been so resilient is 159.5 million people are still employed and getting paychecks. If that goes down, a downward spiral will start,” Heather Long, the chief economist at Navy Federal Credit Union, wrote on X.
According to the Labor Department, the biggest surge in new unemployment claims was in Michigan, where 8,490 people filed claims—up 3,259 from the week prior. The state’s job losses came from the manufacturing industry, which is being hit hard by President Donald Trump's steel, aluminum, and automobile tariffs.
Indeed, a number of automobile manufacturing companies have announced layoffs, including Stellantis, Ford, General Motors, and a handful of other companies that manufacture car parts.
Ultimately, the increase in jobless claims comes after the payroll company ADP said that just 37,000 private-sector jobs were created in May—a major slowdown and possibly the first tangible signs that Trump's idiotic tariffs are now impacting the job market.
Economists said that Trump’s tariffs would cut into companies’ profit margins, leading to increased prices, layoffs, or both. And the nonpartisan Congressional Budget Office said on Wednesday that the tariffs would cause the U.S. economy to shrink.
“If the president does not reverse course, he will increase the unemployment rate to recessionary levels,” Michael R. Strain, director of economic policy studies at the American Enterprise Institute, told CNBC in April.
All eyes are now on the Bureau of Labor Statistics, which will release its monthly jobs report Friday morning. Should that number come in under economists’ expectations, it will be more proof that their fears of Trump’s tariffs are coming true.
Reprinted with permission from Daily Kos.
