The United States unemployment claims decreased during the last week but the economy faces growing indicators of a slowdown because of ongoing job losses and weak housing market performance.
The Labor Department reported that initial jobless claims decreased by 5,000 to 245,000 during the period from June 14 to June 20. The previous week’s jobless claims report showed an eight-month high due to extensive layoffs.
The economic slowdown results from President Trump’s tariff policies which increased material costs for steel aluminum and lumber imports according to economists. The increased costs from tariffs create difficulties for businesses which results in decreased hiring activities.
The housing sector provided additional evidence when single-family home building permits reached their lowest point in two years during May. The construction industry faces reduced activity because of both rising interest rates and tariffs according to builders.
The Federal Reserve maintains its interest rates at 4.25%-4.50% while policymakers at the Fed monitor both the Middle East conflict and inflationary pressures.
The upward trend in jobless claims has become evident according to Carl Weinberg from High Frequency Economics. The first indicators of economic contraction have started to emerge.
The labor market demonstrates historical strength yet it shows initial signs of weakness because of rising policy uncertainty and elevated costs that affect both employers and consumers.
