U.S. Jobless Claims Jump to Two-Month High Amid Signs of Labor Market Softening

The number of Americans filing for new unemployment benefits rose sharply last week, reaching a two-month high, according to Labor Department data released Thursday. However, the surge is largely attributed to seasonal factors, particularly school spring breaks in New York state, and may not yet signal a broader deterioration in the labor market.

Initial jobless claims increased by 18,000 to a seasonally adjusted 241,000 for the week ending April 26 — the highest reading since February and above the 224,000 forecast by economists. On an unadjusted basis, claims rose by nearly 13,000, with New York accounting for over 15,000 of those due to school-related closures. Massachusetts also saw a notable increase, partially offset by declines in Connecticut and Missouri.

Despite the temporary nature of this rise, other indicators point to a gradually cooling labor market. Continued claims — the number of people receiving benefits beyond the initial week — surged by 83,000 to 1.916 million, the highest level since late 2021. This suggests a slower pace of hiring as economic uncertainty grows.

The labor market, while not in recession territory, faces headwinds from President Donald Trump’s sweeping trade tariffs, which have already led to corporate cost-cutting. United Parcel Service (UPS) announced this week it would cut 20,000 jobs and close 73 facilities, citing reduced deliveries for Amazon.

The U.S. economy contracted last quarter for the first time in three years, driven by a spike in imports as firms raced to front-load inventories ahead of rising tariffs — a move that may now weigh on hiring and investment decisions.

Markets showed muted reaction to the data: U.S. stocks opened higher, the dollar strengthened modestly, and Treasury yields were mixed as investors await further clarity on the Federal Reserve’s next policy move.