WASHINGTON — Weekly applications for unemployment benefits saw a modest increase, though job losses continue to stay at historically low levels even as the Iran war creates economic uncertainty.
Thursday’s report from the Labor Department showed that unemployment benefit filings climbed to 215,000, marking an increase from the previous week’s total of 210,000. The rolling four-week average, which helps eliminate weekly fluctuations, increased by nearly 6,300 to reach 209,000.
“Initial claims are still impressively low, near historic lows,” Carl Weinberg, chief economist at High Frequency Economics, wrote in a commentary. “The uptick from last week to this week is trivial in a labor market of 159 million workers.″
Weekly unemployment benefit applications — which serve as an indicator of job cuts — have remained steady within a low band of primarily 200,000 to 250,000 per week ever since the U.S. economy recovered from a short but severe pandemic recession in 2020.
Americans receiving unemployment assistance increased by 15,000 to reach 1.79 million during the week ending May 16.
The consistently low claim numbers indicate that most American businesses have avoided resorting to workforce reductions. However, while companies aren’t eliminating positions, they also haven’t been creating many new ones. During the previous year, businesses, nonprofits and government agencies created less than 10,000 positions monthly, representing the weakest job growth outside of recession periods since 2002.
Monthly job growth has shown some improvement this year — reaching an average of 76,000 positions per month between January and April. This compares to employers creating 122,000 jobs monthly in 2024 and averaging close to 400,000 monthly from 2021 through 2023 during the economy’s strong recovery from COVID-19 restrictions.
However, the United States currently requires fewer new positions to prevent unemployment rates from climbing. President Donald Trump’s immigration crackdown and continuing Baby Boomer retirements means that the monthly “break-even rate″ for new hiring could be as minimal as zero. The unemployment rate — standing at 4.3% in April — has actually stayed low by historical measures.
The Iran war has created uncertainty for economic forecasts as elevated energy costs pressure both consumers and businesses. Iran responded to U.S. and Israeli attacks by launching economic warfare — shutting down the Strait of Hormuz, through which a fifth of global oil travels, and triggering the largest worldwide oil supply disruption in history. As a result, American gasoline prices have jumped to an average of $4.43 per gallon from an average $2.98 per gallon before the conflict began, according to AAA.
