The number of Americans filing new applications for unemployment benefits dropped last week, suggesting the economy maintained a steady pace of job growth in May.

Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 227,000 for the week ended May 17, the Labor Department said on Thursday. Economists polled by Reuters had forecast 230,000 claims for the latest week.

They expect claims in the coming weeks to drift into the upper end of their 205,000-243,000 range for this year, mostly driven by difficulties adjusting the data for seasonal fluctuations. That would not suggest a material shift in labor market conditions.

Employers have been largely reluctant to lay off workers despite rising economic uncertainty caused by President Donald Trump's constantly shifting trade policy. Economists, however, see layoffs picking up in the second half of 2025 as the administration's import duties dampen demand, snarl supply chains and stoke inflation.

The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of May's employment report.

The economy added 177,000 jobs in April. Economists expect job growth to slow below 100,000 per month, which they say is needed to keep up with growth in the working-age population.

Data next week on the number of people receiving benefits after an initial week of aid, a proxy for hiring, will shed more light on the health of the labor market in May. The so-called continuing claims increased 36,000 to a seasonally adjusted 1.903 million during the week ending May 10, the claims report showed.

Companies have been reluctant to add to headcount because of the economic uncertainty related to tariffs. That has left many people who lose their jobs to experience long spells of unemployment. The median duration of unemployment jumped to 10.4 weeks in April from 9.8 weeks in March.