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U.S. Jobless Claims Tick Higher, Labor Market Holds Steady Amid Rising Uncertainty
New applications for U.S. unemployment benefits rose moderately last week, but the labor market continues to show resilience despite growing economic uncertainty linked to the Middle East conflict.
Initial jobless claims increased by 16,000 to 219,000 for the week ended April 4, slightly above expectations. The data suggests layoffs remain limited, with no clear evidence that businesses are reducing headcount in response to the recent surge in oil prices.
This stability comes even as energy markets remain volatile. U.S. gasoline prices have climbed above $4 per gallon for the first time in more than three years, while stock markets suffered heavy losses in March.
Economists describe the current environment as a “low-hire, low-fire” labor market, where hiring activity is subdued but layoffs are also minimal due to persistent uncertainty around trade policies and geopolitical risks.
Focus now shifts to inflation, with expectations that March consumer prices will rise sharply. Forecasts point to a monthly increase of up to 1.0%, pushing annual inflation to around 3.3%, well above the Federal Reserve’s 2% target.
Minutes from the Federal Reserve’s March meeting showed that some policymakers are considering further rate hikes if inflation remains elevated. The central bank has kept its benchmark rate steady at 3.50%–3.75%, while expectations for rate cuts this year have significantly diminished.
Although nonfarm payrolls rose by 178,000 jobs in March, other indicators highlight underlying softness. The median duration of unemployment increased to 11.4 weeks, the highest level in nearly four and a half years.
Continuing claims, a measure of ongoing unemployment, fell by 38,000 to 1.794 million. However, this decline may partly reflect workers exhausting their benefits rather than a strong rebound in hiring.
Overall, the labor market remains stable for now, but rising inflation pressures and geopolitical risks could challenge its strength in the months ahead.
