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Applications for US unemployment benefits rose last week to the highest level since February, potentially reflecting volatility around the Memorial Day holiday.
Initial claims increased by 13,000 to 225,000 in the week ending May 30, according to Labor Department data out Thursday. The median estimate in a Bloomberg survey of economists called for 215,000 claims.
The report covers the period that includes Memorial Day and aligns with the start of summer break for some schools. The four-week moving average of initial applications for benefits, a metric that helps smooth out volatility, increased to 214,750 — also the highest since February.
Despite the pickup in claims, the figures still remain close to historically low levels. Continuing claims, a proxy for the number of people receiving benefits, fell to 1.78 million in the previous week.
Looking ahead, a sustained increase in applications for unemployment insurance could indicate higher costs and rising economic uncertainty from the Iran war are beginning to weigh on employers. Continued investment in artificial intelligence has also come at the expense of headcount at some technology companies, driving up layoff announcements in the sector.
Other data out Thursday showed US companies in the tech sector announced 38,242 job cuts in May, the most for any month in nearly two years. Planned cuts in the industry are up more than 65% so far this year compared to the same period in 2025, according to data from outplacement firm Challenger, Gray & Christmas Inc.
What Bloomberg Economics Says…
“AI increasingly is driving targeted workforce reductions, but the jobless-claims data suggest little pressure on activity overall.”
— Eliza Winger
Before adjusting for seasonal factors, initial claims were little changed. Claims in California, Tennessee and Minnesota increased. Texas and New Jersey posted declines.
Separate government data showed a sharper slowdown in labor productivity in the first quarter than previously estimated. Growth in unit labor costs and output were revised lower, and inflation-adjusted hourly compensation fell sharply. Hours worked rose at the start of the year, following a decline in the final three months of 2025.
Even so, nonfarm business labor productivity rose 2.8% from a year ago, indicating companies are gradually improving worker efficiency to mitigate costs.
–With assistance from Giovanna Serafim, María Paula Mijares Torres and Julia Fanzeres.
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