Applications for jobless benefits hold firm as layoffs remain low despite tariff uncertainty

U.S. applications for jobless benefits held steady last week as layoffs remain low despite uncertainty over how President Donald Trump’s tariffs will impact the economy.

The number of Americans applying for unemployment aid was unchanged at 229,000 for the week ending May 10, the Labor Department said Thursday. That’s in line with the 230,000 new applications analysts forecast.

Weekly applications for jobless benefits are seen as representative of U.S. layoffs and have mostly bounced around a healthy range between 200,000 and 250,000 since COVID-19 ravaged the economy and wiped out millions of jobs five years ago.

Even though Trump has paused or rolled back many of his tariff threats, concerns remain about a global economic slowdown that could upend the U.S. labor market, which has been a pillar of the American economy for years.

Last week, the Federal Reserve held its benchmark lending rate at 4.3% for the third straight meeting after cutting it three straight times at the end of last year.

Fed chair Jerome Powell said the risks of both higher unemployment and inflation have risen, an unusual combination that complicates the central bank’s dual mandate of controlling prices and keeping unemployment low.

Average rate on a 30-year mortgage rises to 6.81%, its highest level since late April

The average rate on a 30-year mortgage in the U.S. edged above 6.8% this week, returning to where it was just three weeks ago.

The rate increased to 6.81% from 6.76% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 7.02%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose. The average rate ticked up to 5.92% from 5.89% last week. It’s down from 6.28% a year ago, Freddie Mac said.

Mortgage rates are influenced by several factors, including global demand for U.S. Treasurys, the Federal Reserve’s interest rate policy decisions and bond market investors’ expectations about the economy and inflation.

The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, which it set in mid-January. The average rate’s low point so far was five weeks ago, when it briefly dropped to 6.62%.

Retail sales slow in April after splurge as consumers sought to front-run tariffs

U.S. consumers spent slightly more at retail stores last month after ramping up their shopping in March to get ahead of tariffs.

Sales at retail stores and restaurants rose just 0.1% in April from March, the Commerce Department said Thursday. That is much lower than the previous month’s 1.7% gain, which reflected a surge in car sales as consumers accelerated purchases ahead of President Trump’s 25% duty on auto imports that went into effect this month.

Last month’s tiny increase after the March surge makes it harder to get a clear read on consumer spending trends and reflects the ongoing turmoil and uncertainty in the economy in the wake of Trump’s stop-and-go tariff policies. Many publicly-traded companies have withdrawn or held off on the traditional practice of forecasting their revenues and earnings for the rest of this year because the economic landscape has become so chaotic.

U.S. wholesale prices dropped 0.5% last month despite President Trump’s tariffs

U.S. wholesale prices dropped unexpectedly in April for the first time in more than a year despite President Donald Trump’s sweeping taxes on imports.

The producer price index — which tracks inflation before it hits consumers — fell 0.5% last month from March, the first drop since October 2023 and the biggest in five years. Compared to a year earlier, producer prices rose 2.4% last month, decelerating from a 3.4% year-over-year gain in March, the U.S. Labor Department reported Thursday.

Excluding volatile food and energy prices, so-called core wholesale prices dipped 0.4% from March and rose 3.1% from a year earlier. Economists had forecast that producer prices rose modestly in April.

Services prices fell 0.7%, the biggest drop in government records going back to 2009, on shrinking profit margins at wholesalers and retailers. Wholesale food prices fell 1%, and egg prices plunged 39%, though they are still up nearly 45% from a year ago because of bird flu.

On Tuesday, the Labor Department reported that consumer prices rose just 2.3% last month from April 2024 — smallest year-over-year gain in more than four years.

Dick’s Sporting Goods to buy struggling shoe chain Foot Locker for $2.4 billion

Dick’s Sporting Goods is buying the struggling footwear chain Foot Locker for about $2.4 billion, the second buyout of a major footwear company in as many weeks as business leaders struggle with uncertainty over U.S. President Donald Trump’s tariffs.

Dick’s said Thursday that it expects to run Foot Locker as a standalone unit and keep the Foot Locker brands, which include Kids Foot Locker, Champs Sports, WSS and Japanese sneaker brand atmos.

“Sports and sports culture continue to be incredibly powerful, and with this acquisition, we’ll create a new global platform that serves those ever evolving needs through iconic concepts consumers know and love, enhanced store designs and omnichannel experiences, as well as a product mix that appeals to our different customer bases,” Dick’s CEO Lauren Hobart said in a statement.

Both companies are led by women. Hobart became CEO at Dick’s in 2021, while Mary Dillon has served as CEO of Foot Locker since 2022.

Foot Locker announced a turnaround plan in 2023 in part to help improve its relationship with big brands. Speaking at the J.P. Morgan Retail Round Up Conference last month, Dillon said that Foot Locker is working closely with Nike, specifically in categories including basketball, sneaker culture and kids.

— Compiled via The Associated Press