Jobless Claims Fall Despite Tariff Tensions

The U.S. labor market showed continued strength last week, with new unemployment claims falling despite growing concerns over the economic impact of President Trump’s sweeping “Liberation Day” tariffs. According to the Labor Department, 228,000 Americans filed for jobless benefits in the week ending May 3, down from the previous week’s 241,000. The figure also beat economist forecasts, which had expected 230,000 new filings.

The prior week’s spike was largely attributed to temporary claims from New York school workers during spring break, and analysts noted that this week’s decline reflects underlying stability in the job market. Meanwhile, continuing unemployment claims, which track those still receiving benefits, also dropped to 1.88 million — a sign that displaced workers are finding jobs relatively quickly.

Despite the backdrop of aggressive new tariffs that represent one of the most significant economic policy shifts in years, broader employment data remains resilient. April saw 177,000 jobs added across the U.S. economy, outperforming expectations and keeping the unemployment rate steady at 4.2%.

Federal Reserve Chair Jerome Powell reinforced that view during a press conference on Wednesday, saying “a wide set of indicators suggests that conditions in the labor market are broadly in balance.” The Fed opted to keep interest rates unchanged at its latest meeting, balancing political pressure with persistent strength in the job market.

For now, the labor market appears to be weathering the policy shock, offering reassurance to markets and policymakers that economic momentum remains intact, at least in the short term.

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