Initial jobless claims in the U.S. surged to a seasonally adjusted 241,000 for the week ending April 26 — an increase of 18,000 from the previous week and well above the 225,000 expected by economists. The data, released by the Labor Department on Thursday, marks the highest total since February 22 and is being seen as a potential early sign of labour market softening amid broader economic strain.
Continuing claims, which reflect the number of people still receiving unemployment benefits and lag by a week, also climbed sharply. They rose by 83,000 to 1.92 million, the highest level since November 13, 2021. The insured unemployment rate ticked up to 1.3%.
While some of the increase appears to stem from seasonal distortions — notably spring break in New York, where unadjusted claims more than doubled to over 30,000 — analysts say the broader trend suggests underlying weakness.
“The deterioration in the timeliest hiring and firing indicators over the last couple weeks suggests that jobless claims will trend up over coming weeks,” noted Sam Tombs, chief U.S. economist at Pantheon Macroeconomics.
The rise in unemployment claims comes as broader economic indicators point to growing stress. On Wednesday, the Commerce Department reported that GDP contracted by 0.3% in the first quarter — the first decline in three years — driven by a surge in imports ahead of President Donald Trump’s tariffs, weaker consumer spending, and reduced government outlays.
Trump’s tariff actions, particularly the April 2 “Liberation Day” announcement imposing duties of up to 145% on Chinese goods, have sent ripples through manufacturing and supply chains. The resulting slowdown in industrial activity has led some companies to begin trimming payrolls.
One notable example is UPS, which announced this week it would cut 20,000 jobs and shutter 73 facilities, citing reduced Amazon-related delivery volume and shifting business needs.
Despite these developments, the labour market remains relatively strong by historical standards. Weekly jobless claims are still within the 200,000–250,000 range that economists consider consistent with a healthy job market, and the four-week moving average — which smooths week-to-week volatility — rose only modestly, to 226,000.
Still, economists caution that further layoffs may follow if business sentiment continues to decline. Friday’s nonfarm payroll report will offer a more comprehensive picture, with analysts expecting an April jobs gain of around 130,000, down from March’s 228,000.
“While the labour market is far from recessionary territory, it could turn if other companies follow UPS’ suit,” said Andrew Stettner, director of economy and jobs at the Century Foundation.
Whether these developments mark the start of a broader slowdown or merely a temporary wobble remains to be seen — but markets and policymakers alike will be watching Friday’s data closely.