The number of Americans filing for unemployment benefits dropped slightly last week to 245,000, suggesting the labor market remains resilient—but not without signs of strain. This slight decline from the previous week’s 250,000 claims keeps unemployment claims within a historically low band, yet recent trends signal that the job market may be cooling.
The four-week average of unemployment claims, which helps smooth out week-to-week fluctuations, rose to 245,500—the highest it has been since August 2023. Meanwhile, the number of Americans continuing to collect unemployment benefits fell to 1.95 million for the week ending June 7.
For context, weekly jobless claims have largely remained between 200,000 and 250,000 since the economy bounced back from the sharp COVID-19 recession in 2020. However, recent claims have hovered at the upper edge of that range, raising concerns that the momentum in hiring is waning.
Through the first half of 2025, employers have added an average of 124,000 jobs per month. That’s a notable slowdown from 2024’s monthly average of 168,000 and a far cry from the boom years of 2021–2023, when employers were averaging nearly 400,000 new jobs per month as the economy rebounded and demand surged.
Analysts point to several contributing factors behind the recent deceleration. Chief among them are the residual effects of a series of 11 interest rate hikes in 2022 and 2023. While those hikes helped tame inflation, they also cooled business activity and hiring.
More recently, new economic uncertainty has emerged from aggressive trade policies. Sweeping tariffs—10% on imports from nearly every nation—have been implemented, generating concern among business leaders and economists. These tariffs are believed to be stalling investment, disrupting supply chains, and heightening fears of higher consumer prices.
Economist Carl Weinberg of High Frequency Economics noted that businesses appear cautious about letting go of workers. “Firms have been hoarding skilled labor, reluctant to lay off trained employees in a tight labor market,” he explained. “But with uncertainty still high and demand softening, that hesitation may begin to fade.”
