The U.S. labor market is still flexing its resilience muscles, despite the crosswinds of economic policy shifts and global trade tensions. Weekly jobless claims released Thursday showed a modest increase, perfectly in sync with what Wall Street analysts had predicted, while continuing claims took a step down—hinting that the job market, for now, remains sturdy beneath the surface.
Initial Claims Edge Up, But No Alarms Yet
For the week ending April 5, the number of Americans filing for unemployment benefits rose by 4,000, landing at 223,000. This uptick wasn’t a surprise—economists had been calling for that very number, according to Bloomberg’s latest poll. The prior week’s figure remained untouched, signaling stability in how these fluctuations are being measured.
The four-week moving average, a steadier gauge that smooths out weekly noise, held flat at 223,000. Meanwhile, unadjusted claims climbed more sharply, up by 15,307 to reach 215,392—a seasonal bump that analysts largely anticipated.
So, what does all this mean? According to Thomas Simons, Chief U.S. Economist at Jefferies, the answer is simple: there’s no clear evidence yet that job losses are accelerating. “Despite concerns about trade policy, spending cuts from the Department of Government Efficiency, and recent soft data we’ve seen indicating businesses expect to pull back hiring, the labor market has held up well up to this point,” Simons wrote in a client note.
Continuing Claims Fall, Pointing to Strength in Re-Hiring
Perhaps more telling was the drop in continuing claims—the number of people still receiving unemployment benefits. For the week ended March 29, that figure dropped by 43,000 to settle at 1.85 million. That’s lower than analysts expected, who had forecasted a slightly higher 1.89 million.
This decrease, paired with a downward revision to the previous week’s level, suggests that job seekers aren’t staying unemployed for long—a bullish sign for labor market watchers. The four-week average also declined slightly by 250 to 1.87 million.
Trump’s Tariff Pause Sends Mixed Signals
Policy undercurrents are shifting, however. President Donald Trump on Wednesday announced a 90-day pause on certain tariffs for nations that haven’t retaliated against the U.S. But in a sharp pivot, he simultaneously raised tariffs on Chinese imports in response to Beijing’s countermeasures. As a result, the effective tariff rate on Chinese goods has skyrocketed to 145%, according to a CNBC report citing a White House source.
These moves could eventually ripple into the labor market, though the current claims data doesn’t yet reflect that. Businesses are likely recalibrating, but any impact on hiring or layoffs could take months to materialize.
Cautious Optimism Post-March Jobs Report
Just days earlier, Friday’s employment report showed that U.S. employers added more jobs than anticipated in March. However, the unemployment rate ticked slightly higher, a paradox that often occurs when more people enter the labor force looking for work.
Simons warned that the headline jobs gain might be masking potential trouble ahead. “We cautioned to be weary of hiring momentum, as effects from tariff uncertainty were likely not baked into the headline (nonfarm payroll) beat,” he said. “While right now is likely too soon to see the effects reflected in claims data, there does remain some upside risk in that same time span.”
So, while today’s report reflects a labor market that’s still holding the line, looming tariff pressures and policy shifts may yet cloud the picture in the months to come. Keep your eye on those moving averages—and maybe brace for some turbulence.
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