US Weekly Jobless Claims At Highest Level Since Country Launched War On Iran

Jobless claims in the US increased more than expected in the week ended May 30, but the underlying trend was consistent with a stable labour market.

The initial claims for state unemployment rose 13,000 to a seasonally ‌adjusted 225,000, as per the Labor Department.  

The four-week moving average of claims rose by 6,500 to 214,750.

This was the highest level in four months. Layoffs still remain historically low in spite of economic uncertainty due to the US-Iran war.

Weekly filings for unemployment benefits are seen as a proxy for layoffs in the US as well as a real-time indicator of how the job market is.

Despite historically low layoffs, the labour market is still in what economists call a “low-hire, low-fire” state, as per the Associated Press. This means while the unemployment rate is low at 4.3%, workers without jobs are struggling to find new employment.

Since the US economy emerged from the pandemic recession, weekly jobless aid claims have been stable mostly between 200,000 and 250,000 . But, hiring started slowing about two years ago.

It reduced further in 2025 due to US President Donald Trump's tariff rollouts, mass layoffs in the federal workforce and the lingering effects of high interest rates.

But, while high-profile job cuts by technology firms linked to the adoption of artificial intelligence (AI) have created concerns, layoffs have remained low, with claims this year restricted to a range of 190,000-230,000.

In May, 97,006 job cuts were announced by US-based employers. About 39% of the layoffs were in the ⁠technology sector, global outplacement firm Challenger, Gray and Christmas said in a report. This was an increase of 16% from April.

Compared to the same period last year, planned job ⁠cuts increased 3%.

While the US-Israeli war on Iran has not yet made a significant impact on the labour market, uncertainty is increasing, Reuters reported. The war has severely disrupted the supply of commodities and ‌prices of goods like energy, aluminum and fertilisers have risen.

Since the conflict started in late February, the average price for a gallon of gas in the US has surged from $3 to $4.24. Besides impacting consumers, higher costs can make businesses hesitant to hire workers.