US jobless claims rise, but labor market stays stable

More Americans filed for unemployment benefits last week, but the labor market still looked more steady than shaky. Initial claims for state jobless aid rose by 13,000 to a seasonally adjusted 225,000 in the week ended May 30, the highest since the first week of February and above the 213,000 economists had expected.

The increase mattered, but not enough to signal a broad break. The four-week moving average edged up only modestly, and continuing claims, a rougher gauge of hiring strength, fell by 8,000 to 1.777 million in the week ended May 23. The insured unemployment rate held at 1.2%, a reading that still points to a labor market cooling gradually rather than cracking.

That picture fits with what employers are saying. The Federal Reserve’s May Beige Book described most districts as operating in a low-hire, low-fire environment, with firms hiring selectively and mostly to fill critical roles or replace workers who left. It also said workers were increasingly reluctant to change jobs because of economic uncertainty, while wage growth remained generally modest to moderate and largely in line with inflation.

Layoff announcements have risen, especially in technology, but the numbers still do not point to a mass downturn. Challenger, Gray & Christmas said U.S. employers announced 97,006 job cuts in May, about 39% of them in tech. The total was up 16% from April and 3% from a year earlier, and it was the highest May figure since 2020. Year to date, employers announced 397,755 cuts, down 43% from 696,309 in the first five months of 2025. AI was cited as a leading reason for cuts for the third straight month.

For now, the broader macro backdrop remains resilient. The Middle East conflict has disrupted commodity markets and pushed up prices for energy, aluminum and fertilizers, but it has not yet produced a measurable hit to U.S. hiring. Economists surveyed expected Friday’s payroll report to show nonfarm payroll growth slowing to about 85,000 in May from 115,000 in April, while the unemployment rate was seen holding at 4.3%.

That is the line investors and the Federal Reserve are watching: if claims keep rising, continuing claims climb, payroll gains slow further, and unemployment edges higher, then the story shifts from a healthy pause to a broader jobs slowdown. For now, the labor market is showing stress at the edges, not across the board.