US jobless aid filings fall to 189,000 despite economic headwinds and war in Iran

Washington: The number of Americans filing for unemployment benefits tumbled below 200,000 last week despite a number of economic headwinds including the war in Iran.

US jobless aid applications for the week ending April 25 fell by 26,000 by to 189,000, down from the previous week's 215,000, the Labor Department reported Thursday. That's well below the 214,000 new applications analysts surveyed by the data firm FactSet were expecting.



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Filings for unemployment benefits are considered a proxy for U.S. layoffs and are close to a real-time indicator of the health of the job market.

The Iran war, now in its ninth week, has injected a large degree of uncertainty about how it will affect the US and global economies even as Iran and the US remain under a ceasefire agreement.

US financial markets have rebounded near record levels and prices for a barrel of US crude oil remain elevated around USD 104 per barrel. That's better than the USD 112 earlier this month, but still 50 per cent higher than before the war began. Gas prices also much higher since the war began - AAA says the national average Thursday was at USD 4.30 a gallon -- saddling businesses and consumers with higher costs.

The largest monthly jump in gas prices in six decades sent consumer prices up 3.3 per cent in March from a year earlier, the Labour Department recently reported. That's up sharply from just 2.4 per cent in February and the biggest yearly increase since May 2024. On a monthly basis, prices rose 0.9 per cent in March from February, the largest such increase in nearly four years.

This comes at a time when US inflation was already above the Federal Reserve's 2 per cent target. On Wednesday, the Fed opted to leave its benchmark rate where it was, citing economic uncertainty caused by instability in the Middle East and persistently high inflation.

Lower interest rates can boost the economy and hiring, but also tend to fuel inflation.

Fed officials voted to cut rates three times to close 2025 out of concern for a weakening job market.

The Labour Department reported earlier this month that US employers added an unexpectedly strong 178,000 new jobs in March, nudging the unemployment rate back down to 4.3 per cent. That followed a surprisingly large loss of 92,000 jobs in February. Revisions also have trimmed 69,000 jobs from December and January payrolls, a sign that the labour market remains under strain.

A number of high-profile companies have cut jobs recently, including Morgan Stanley,Block, UP S, Amazon and several other tech companies.

Weekly jobless aid applications have stabilized in a range mostly between 200,000 and 250,000 since the US economy emerged from the pandemic recession. However, hiring began slowing about two years ago and tapered further in 2025 due to President Donald Trump's erratic tariff rollouts, his purge of the federal workforce and the lingering effects of high interest rates meant to control inflation.


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Employers added fewer than 200,000 jobs last year, compared with about 1.5 million in 2024, according to the data firm FactSet.

The American labor market appears stuck in what economists call a "low-hire, low-fire" state that has kept the unemployment rate historically low, but has left those out of work struggling to find a new job. The recent artificial intelligence boom and the investment required to develop it is also making companies reluctant to hire.

The Labor Department's report Thursday showed that the four-week moving average of jobless claims, which evens out some of the weekly volatility, came in at 207,500, about 3,500 lower than the previous week.

The total number of Americans filing for unemployment benefits for the previous week ending April 18 fell to 1.79 million, a decrease of 23,000.