The U.S. labor market delivered mixed signals this week as new jobless claims rose to their highest level since February, while private-sector hiring and job openings both exceeded expectations, highlighting an economy that continues to create jobs even as some employers become more cautious.
The Labor Department reported Thursday that initial unemployment claims increased by 13,000 to 225,000 in the week ending May 30. The figure came in above the 213,000 economists surveyed by Reuters had expected and marked the highest reading in more than three months.
The increase coincided with a rise in announced layoffs. According to Challenger, Gray & Christmas, U.S. employers announced more than 97,000 job cuts in May, up 16% from April. Nearly 39% of those layoffs came from the technology sector, reflecting continued restructuring across the industry.
However, hiring data pointed in the opposite direction.
ADP reported that private employers added 122,000 jobs in May, beating analyst forecasts of 110,000 and marking the strongest monthly gain since January 2025. Employment growth was spread across multiple sectors rather than being concentrated primarily in healthcare, as seen in previous months.
"Hiring was more broad-based in May than we've seen in the last few years," said ADP chief economist Nela Richardson. "The labor market continues to show sustained momentum going into the summer hiring season."
Education and health services led job creation with 57,000 new positions, followed by trade, transportation and utilities with 36,000 jobs. Professional and business services added 11,000 positions, while construction and leisure and hospitality each gained 8,000 jobs.
Small businesses were a major contributor to hiring growth. Companies with fewer than 50 employees added 67,000 jobs, while employers with more than 500 workers added roughly 40,000 positions.
Additional signs of labor-market resilience emerged from the Labor Department's Job Openings and Labor Turnover Survey, or JOLTS. The report showed job openings climbed by 731,000 to 7.618 million in April, the highest level since May 2024 and well above the 6.88 million economists surveyed by Reuters had projected.
The surge in openings suggested employers are still seeking workers despite ongoing concerns about tariffs, inflation, geopolitical tensions and the growing impact of artificial intelligence. Yet companies remain hesitant to follow through with hiring. The JOLTS report showed hiring fell by 419,000 to 5.116 million in April, while the hiring rate dropped to 3.2% from 3.5% a month earlier.
Layoffs, meanwhile, declined by 192,000 to 1.692 million, indicating businesses are generally holding on to existing workers even as they slow the pace of new recruitment.
Bloomberg noted that seasonal factors tied to Memorial Day and the start of summer breaks in some school districts may have contributed to the latest increase in weekly claims. Taken together, the latest reports suggest the labor market remains resilient but increasingly uneven, with strong demand for workers coexisting alongside growing caution among employers.
