US jobless claims tick up to 200,000 but stay near historic lows, Labor Department says

U.S. jobless claims rose last week but remain at historically low levels despite ongoing economic challenges, according to the latest government data.

The Labor Department reported Thursday that 200,000 Americans filed for unemployment benefits in the week ending May 2, an increase of 10,000 from the previous week. The figure came in below economists’ expectations of 205,000 new applications, as surveyed by data firm FactSet.

The prior week’s claims, initially reported as the lowest since 1969, were revised upward by 1,000 to 190,000. Weekly unemployment filings, considered a proxy for layoffs across the country, continue to indicate a resilient job market despite multiple economic headwinds.

The Iran war, now in its third month, has introduced significant uncertainty into the economic outlook, even as both nations operate under a ceasefire agreement with growing optimism for a resolution. This geopolitical tension has rippled through global markets, affecting everything from stock prices to energy costs.

While U.S. financial markets have rebounded to near-record levels, energy prices remain significantly elevated. A barrel of U.S. crude oil currently trades around $90, down from highs of $112 last month but still 36% higher than pre-war levels. This has translated to higher prices at the pump, with the national average for gasoline reaching $4.56 per gallon according to AAA, placing additional financial pressure on both businesses and consumers.

Inflation concerns persist alongside these employment figures. Last week, the government reported that a key inflation measure jumped in March as gas prices soared, providing further evidence that the Iran conflict is driving up living costs. The Commerce Department’s inflation gauge, closely monitored by the Federal Reserve, rose 0.7% from February to March and showed a 3.5% increase year-over-year—the largest annual jump in almost three years.

Even core inflation, which excludes volatile food and energy prices, showed an increase in March, complicating the Federal Reserve’s monetary policy decisions. With inflation still exceeding the Fed’s 2% target, policymakers opted to leave benchmark interest rates unchanged at their most recent meeting, citing economic uncertainty stemming from Middle East instability and elevated inflation.

The Fed had previously cut rates three times toward the end of 2025, concerned about weakening labor market conditions. Lower interest rates typically stimulate economic growth and hiring but can also fuel inflation—creating a delicate balancing act for policymakers.

The broader employment picture has shown mixed signals in recent months. In March, U.S. employers added a surprisingly strong 178,000 new jobs, lowering the unemployment rate to 4.3%. This followed an unexpected loss of 92,000 jobs in February. Additionally, revisions reduced December and January payrolls by 69,000 jobs, indicating ongoing labor market pressures.

Several high-profile companies have recently announced job cuts, including Morgan Stanley, Block, UPS, Amazon, and Disney, reflecting corporate caution amid economic uncertainty.

Weekly jobless claims have generally remained within a range of 200,000 to 250,000 since the economy began recovering from the pandemic recession. However, hiring has slowed considerably over the past two years, further tapering in 2025 due to President Trump’s tariff policies, federal workforce reductions, and the lingering effects of previously high interest rates.

According to FactSet, employers added fewer than 200,000 jobs last year, a dramatic decrease from the approximately 1.5 million jobs created in 2024.

Economists characterize the current labor market as caught in a “low-hire, low-fire” pattern, maintaining historically low unemployment rates while creating challenges for job seekers. The ongoing artificial intelligence boom and associated investment requirements have further contributed to hiring hesitancy among businesses.

Thursday’s Labor Department report also showed that the four-week moving average of jobless claims, which smooths out weekly fluctuations, decreased to 203,250, down 4,500 from the previous week. The total number of Americans receiving unemployment benefits for the week ending April 25 fell by 10,000 to 1.77 million.

The government will release its comprehensive monthly jobs report for April on Friday, which will provide a more complete picture of the labor market’s current health.