US jobless aid filings, a proxy for layoffs, hit highest level since
Iran war began in February
[June 05, 2026] By
MATT OTT
WASHINGTON (AP) — The number of Americans filing for jobless aid hit
their highest level in four months last week, but layoffs remain
historically low despite ongoing economic uncertainty brought on by the
war in Iran.
U.S. applications for unemployment benefits for the week ending May 30
increased by 13,000 to 225,000, the Labor Department reported Thursday.
That’s the most since early February, before the U.S. and Israel
launched attacks on Iran, but still a historically low level. Analysts
surveyed by FactSet expected 211,000 new applications.
Weekly 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.
Despite historically low layoffs, the labor market seems to be mired in
what economists call a “low-hire, low-fire” state. That’s kept the
unemployment rate low at 4.3%, but left many of those out of work
struggling to find new employment.
Though U.S. employers delivered a surprising 115,000 new jobs in April,
the Iran war has injected a large degree of uncertainty about the
broader U.S. economy and labor market.
The Strait of Hormuz, through which travels one-fifth of the world’s
oil, remains closed. Since the beginning of the war in late February,
oil prices have spiked about 50% and the average price for a gallon of
gas in the U.S. is now $4.24, up from less than $3 in late February.
Besides hitting consumers’ pocketbooks, those higher costs can make
businesses reluctant to hire.
Data from the U.S. government showed that inflation at the consumer
level rose 3.8% from April 2025, the biggest jump in three years. Food
prices are also up, but may not yet fully reflect rising energy costs
due to the Iran war, analysts say.
Another recent report showed that wholesale prices shot up 6% from a
year ago, the highest point in more than three years.
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 This comes at a time when U.S.
inflation is already above the Federal Reserve’s 2% target. The Fed
opted to leave its benchmark rate alone at its last meeting, citing
economic uncertainty caused by instability in the Middle East and
still-elevated inflation. Most analysts don’t expect the Fed to cut
rates any time soon.
Lower interest rates can boost the economy and
hiring, but also tend to stoke inflation, leading a number of Fed
policymakers to say they are actually willing to consider an
interest rate hike this year.
On top of that, the recent artificial intelligence
boom and the investment required to develop it could alter or even
replace some jobs.
Among the companies that have cut jobs recently are Verizon, UPS,
Amazon, Disney, Starbucks and Walmart.
Weekly jobless aid applications have stabilized in a range mostly
between 200,000 and 250,000 since the U.S. 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.
Employers added fewer than 200,000 jobs last year, compared with
about 1.5 million in 2024, according to the data firm FactSet.
The government issues its May jobs report on Friday.
The Labor Department’s report Thursday showed that the four-week
moving average of jobless claims, which softens some of the weekly
volatility, rose by 6,500 to 214,750.
The total number of Americans filing for unemployment benefits for
the previous week ending May 23 fell by 8,000 to 1.78 million, in
line with analyst forecasts.
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