"The Golden Age for employers is ending," per Bloomberg

New applications for unemployment benefits in the U.S. declined last week, but the broader picture suggests a weakening job market, as businesses remain cautious about hiring amid ongoing economic uncertainty. This hesitancy raises the possibility that the unemployment rate could climb in June.

The Labor Department’s weekly report—one of the most current indicators of economic conditions—revealed that the number of people receiving state unemployment benefits in mid-June rose to its highest point in three and a half years. While layoffs remain low by historical standards, hiring activity has slowed. Economists point to President Donald Trump’s expansive import tariffs as a significant factor creating planning difficulties for businesses, thereby dampening job creation.

Despite the cooling labor market, analysts believe the slowdown hasn’t yet reached a level that would prompt the Federal Reserve to cut interest rates in July. Fed Chair Jerome Powell told lawmakers this week that the central bank needs additional time to determine whether tariffs are pushing inflation higher before taking further action on rates.

“These figures align with a labor market that’s softening, especially when it comes to hiring,” said Nancy Vanden Houten, lead economist at Oxford Economics. “We don’t yet see the weakness necessary for a rate cut before December, but the risk is growing that once the Fed begins easing, it may have to move aggressively.”

For the week ending June 21, initial filings for state jobless benefits fell by 10,000 to a seasonally adjusted 236,000, slightly better than the 245,000 forecasted by economists in a Reuters poll. However, the data may have been skewed by the Juneteenth holiday, which likely contributed to a temporary dip in claims.

Looking past the calendar effects, layoffs appear to be ticking up under pressure from the import duties.

The number of people continuing to receive unemployment aid after their initial claim—a rough measure of how many are finding new work—rose by 37,000 to a seasonally adjusted 1.974 million for the week ending June 14. That’s the highest level since November 2021.

These continuing claims cover the same period as the government’s household survey for the June unemployment rate, leading some economists to predict an uptick in the rate from 4.2% in May to 4.3% in June.

A separate survey by the Conference Board found that consumer confidence in the job market is also slipping, with the percentage of respondents who believe jobs are “plentiful” dropping to its lowest point in over four years.