Families Suffer Economic Strain as Unemployment Applications Hit Three-Month High

The number of Americans applying for unemployment benefits rose by the most in nearly three months last week, signaling that layoffs may be on the rise and adding to evidence that the labor market is slowing.

The Labor Department reported Thursday that initial claims for state unemployment benefits climbed by 11,000 to a seasonally adjusted 235,000 for the week ending August 16, meaning thousands more American families are relying on unemployment just to stay afloat. That marks the sharpest weekly increase since late May and comes in above economists’ forecasts of 225,000.

For months, the labor market has been defined by low levels of layoffs but sluggish hiring as businesses adjust to President Donald Trump’s protectionist trade policies. Those tariffs have pushed the nation’s average import duty to its highest level in a century, raising costs and squeezing employers.

Job creation has slowed sharply. Over the past three months, payrolls grew by an average of just 35,000 jobs per month, according to government data released in early August. Domestic demand also weakened, expanding at its slowest pace since late 2022 in the second quarter.

The number of Americans receiving benefits after their first week of aid—a measure often seen as a gauge of re-employment prospects—rose by 30,000 to 1.972 million during the week ending August 9, the highest level since November 2021. Economists said this uptick aligns with consumers’ growing perception that jobs are becoming harder to find. With costs and unemployment rising at the same time, even more families will struggle to pay their bills.

The elevated continuing claims suggest an economy where laid-off workers are struggling longer to secure new employment. Analysts noted that the trend is consistent with the unemployment rate edging up to 4.3% in August, compared to 4.2% in July.

Together, the rise in claims, slower hiring, and weaker demand point to a labor market losing momentum as trade frictions and economic uncertainty weigh on families.