The labor force is appearing increasingly strained, with the most recent report reflecting a troubling increase in unemployment insurance filings. Combined with the 247,000 first-time claims for unemployment insurance filed last week, the highest weekly total since October 2024. That increase in claims comes at a time when a wave of layoffs and all-around economic instability is making jobs harder to find for millions.
Employers announced an astounding 696,309 job cuts through only the first five months of 2025. This is a shocking 80% increase from the same time last year. The pandemic has dealt another blow to businesses, both large and small. Continuing claims for unemployment insurance have jumped to their highest level in three-and-a-half years.
In May, employers planned 93,816 job cuts, a drop of 12% from April. The overall trend remains troubling. The federal government has reported job losses for three consecutive months, shedding 13,000 jobs in February, 4,000 in March, and 9,000 in April. These expensive layoffs have made up a huge chunk of the thousands of overall job losses.
Economic Factors Behind Job Cuts
The lack of outpouring of job cuts has caused by perfect economic storm. An astounding 131,257 announced job cuts are due to “market/economic conditions.” This is a powerful demonstration of how many companies are purposefully rising to meet new economic realities. Tariffs have contributed to this trend, with 2,097 announced job cuts specifically attributed to tariffs.
Andrew Challenger, senior vice president of Challenger, underlined the pressures companies are under in these drastically shifting conditions. He continues, “Tariffs, funding cuts, consumer spending, and general economic pessimism are bludgeoning companies’ workforces. Such a recognition would go a long way towards addressing the complex set of factors that employers are grappling with in today’s economy.
The hiring rate did make a modest comeback in April, increasing to 3.5%. However, this rate remains below pre-pandemic levels. As private enterprises soften their workforces to compensate for inflationary hurdles, the labor market remains one of paradoxical movement.
Job Market Overview and Expert Insights
Analysts are more than a little interested in all aspects of today’s labor market empyrean. Nela Richardson, ADP’s chief economist, provides an evocative snapshot of today’s tight labor market. She paints it as a continued boom landscape punctuated by stops and starts, coming from obvious slowdowns, or pullbacks in hiring. This feeling is indicative of the real ambiguity that many firms are facing right now as they decide to hire.
That’s why Claudia Sahm, chief economist at New Century Advisors, cautioned against assuming long-term benefits from job losses caused by the tariffs. What was surprising was the admission that the labor market is awesome. As she observed, this is not extraordinary and that right now we are operating under extraordinary stresses on the economy. The balance is a difficult one, as her comments highlight—market stabilization while maintaining high levels of employment. Beyond that, all of them have tackled the economic underpinnings of job loss.
Second, don’t underestimate the impacts of early layoffs. Instead, they may be signaling broader troubles in the labor market, particularly from large tariffs. As various sectors continue to grapple with these pressures, stakeholders remain watchful for signs of further changes in employment trends.
Individual Stories Amid Broader Trends
Jordan Williams officially lost his job on April 11, highlighting the personal toll that increasing layoffs are taking on individuals and families across the country. That type of piece is being written more often these days, as employers increasingly face pressures from rising costs and economic unknowns.
Employers announced 717,605 planned job cuts so far in 2023, the third-highest total for a January-through-May period since Challenger began keeping records on layoffs in 1993. As a consequence, millions of workers will be left to fend for themselves in their search for gainful employment.