WASHINGTON (Reuters) – The number of Americans filing new applications for unemployment benefits fell last week, suggesting labor market conditions remained stable in April, though uncertainty around tariffs is making businesses hesitant to boost hiring.
Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 215,000 for the week ended April 12, the Labor Department said on Thursday. Economists polled by Reuters had forecast 225,000 claims for the latest week.
There was still no sign yet that mass firings of federal government workers were impacting the labor market.
President Donald Trump has slapped import duties on virtually all foreign merchandise and his trade policy has constantly shifted, which economists said made it difficult for businesses to plan ahead. The tariffs have ignited a trade war with China, the biggest source of U.S. imports, and stoked fears of high inflation and stagnation in economic growth.
Federal Reserve Chair Jerome Powell on Wednesday acknowledged the heightened uncertainty.
Speaking at an Economic Club of Chicago event, Powell said “we’re always going to be aiming for maximum employment and price stability,” but added “I do think we’ll be moving away from those goals, probably for the balance of this year, and then, or at least, not making any progress.”
Low layoffs have anchored the labor market. With business sentiment in the doldrums, economists are bracing for a rise in unemployment in the coming months. The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of April’s employment report.
The economy added 228,000 jobs in March while the unemployment rate rose to 4.2% from 4.1% in February.
Next week’s data on the number of people receiving benefits after an initial week of aid, a proxy for hiring, could shed more light on the labor market’s fortunes in April.
The so-called continuing claims increased 41,000 to a seasonally adjusted 1.885 million during the week ending April 5, the claims report showed.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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