WASHINGTON – U.S. jobless claim applications rose last week but remain at historically low levels despite elevated inflation and other economic headwinds.
The number of Americans filing for unemployment benefits in the week ending May 2 rose by 10,000 to 200,000, the Labor Department reported Thursday. That’s fewer than the 205,000 new applications analysts surveyed by the data firm FactSet were expecting.
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The previous week’s new claims figure, which was the fewest since 1969, was revised up by 1,000 to 190,000.
Weekly filings for unemployment benefits are considered a proxy for U.S. layoffs and are close to a real-time indicator of the health of the job market.
Despite dwindling layoffs shown in government data, the Iran war, now in its third month, has injected a large degree of uncertainty about how it will affect the U.S. and global economies even as Iran and the U.S. remain under a ceasefire agreement with growing optimism that an end to the war is near.
U.S. financial markets have rebounded near record levels and prices for a barrel of U.S. crude oil remain elevated around $90 per barrel. That’s down from highs of $112 last month, but still 36% higher than before the war began. Gas prices also much higher since the war began — AAA says the national average Thursday was at $4.56 a gallon —- saddling businesses and consumers with higher costs.
Last week, the government reported that a key inflation measure jumped in March as gas prices soared, the latest sign that the Iran war is driving the cost of living sharply higher.
An inflation gauge monitored by the Federal Reserve rose 0.7% in March from February, up sharply from the previous month, the Commerce Department said. Compared with a year ago, prices rose 3.5%, the biggest increase in almost three years.
Excluding the volatile food and energy categories, core inflation was also up in March.
This comes at a time when U.S. inflation is already above the Federal Reserve’s 2% target. Last week, the Fed opted to leave its benchmark rate alone, citing economic uncertainty caused by instability in the Middle East and still-elevated inflation.
Lower interest rates can boost the economy and hiring, but also tend to fuel inflation. Fed officials voted to cut rates three times to close 2025 out of concern for a weakening job market.
The Labor Department reported last month that U.S. employers added an unexpectedly strong 178,000 new jobs in March, nudging the unemployment rate back down to 4.3%. That followed a surprisingly large loss of 92,000 jobs in February. Revisions also have trimmed 69,000 jobs from December and January payrolls, a sign that the labor market remains under strain.
The government issues its monthly jobs report for April on Friday.
A number of high-profile companies have cut jobs recently, including Morgan Stanley,Block, UPS, Amazon and Disney.
Weekly jobless aid applications have stabilized in a range mostly between 200,000 and 250,000 since the U.S. economy emerged from the pandemic recession. However, hiring began slowing about two years ago and tapered further in 2025 due to President Donald Trump’s erratic tariff rollouts, his purge of the federal workforce and the lingering effects of high interest rates meant to control inflation.
Employers added fewer than 200,000 jobs last year, compared with about 1.5 million in 2024, according to the data firm FactSet.
Economists say the American labor market appears stuck in a “low-hire, low-fire” state that has kept the unemployment rate historically low, but has left those out of work struggling to find a new job. The recent artificial intelligence boom and the investment required to develop it is also making companies reluctant to hire.
The Labor Department’s report Thursday showed that the four-week moving average of jobless claims, which evens out some of the weekly ups and downs, fell to 203,250, down 4,500 from the previous week.
The total number of Americans filing for unemployment benefits for the previous week ending April 25 declined by 10,000 to 1.77 million.