US weekly jobless claims increase more than expected; labor market remains stable

U.S. weekly jobless claims increased more than expected last week, reaching a seasonally adjusted 225,000 for the week ending May 30, according to the Labor Department. Economists had forecast 213,000 claims, but the four-week moving average rose only slightly to 214,750, indicating stability in the labor market. The rise in claims comes amid high-profile layoffs in the technology sector due to AI adoption, though overall layoffs remain low. U.S.-based employers announced 97,006 job cuts in May, with 39% occurring in tech—a 16% increase from April. However, planned job cuts grew just 3% compared to the same period last year. The Federal Reserve’s Beige Book report noted little change in employment in May, describing a ‘low-hire, low-fire’ environment with selective hiring focused on critical roles. Continuing claims, which reflect ongoing unemployment, fell by 8,000 to 1.777 million for the week ending May 23, signaling steady hiring activity. A separate report from Challenger, Gray & Christmas showed tech layoffs accounted for most job cuts, yet the broader labor market remains resilient. The upcoming May employment report, due Friday, is expected to show nonfarm payrolls rising by 85,000, with the unemployment rate holding steady at 4.3%. The Job Openings and Labor Turnover Survey (JOLTS) also showed hiring declined and layoffs fell in April, supporting the trend of a stable labor market.