WASHINGTON (Reuters) -The number of Americans filing new applications for unemployment benefits fell last week as companies hoard labor, suggesting the economy maintained a steady pace of job growth in May, but it is becoming harder for those out of work to find new opportunities.

The weekly jobless claims report from the Labor Department on Thursday showed unemployment rolls approaching levels last seen in late 2021 amid a reluctance by employers to increase headcount because of economic uncertainty stemming from President Donald Trump's policies, including a shifting position on tariffs, mass deportations of migrants and firings of public workers.

"Employers have so far elected to keep their staff headcounts steady despite the swirling winds of unprecedented policy changes for the economy emanating from down in Washington," said Christopher Rupkey, chief economist at FWDBONDS. "There is no serious deterioration in the labor market to date, and the economy is weathering the storm for now."

Initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 227,000 for the week ended May 17. Economists polled by Reuters had forecast 230,000 claims for the latest week. Labor market resilience has provided the Federal Reserve cover to hold interest rates steady while policymakers monitor the Trump administration's unfolding policies.

Independent surveys, however, point to a pickup in layoffs in the coming months as the administration's import duties hurt demand, snarl supply chains and fuel inflation.    

A survey from S&P Global on Thursday showed a composite measure of manufacturing and services industries employment tipped into contraction territory in May, "primarily reflecting concerns over future demand prospects but also in response to worries over rising costs and labor shortages." 

Business activity, however, increased this month following a truce in the trade war between the U.S. and China. S&P Global said the pausing of higher tariffs for 90 days likely resulted in some companies front-running imports and orders. 

Economists are expecting layoffs in the transportation, warehousing and retail sectors as tariffs weigh on consumer spending. 

"A large share of these jobs likely will go as consumers' spending swings from above-trend to below-trend in the third quarter, after tariff-driven price rises have kicked in," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "The pace of firing will rise and new hiring will decline, lifting weekly claims to about 250,000 by the end of June."

The rise in business activity this month was accompanied by a surge in price pressures, hinting at an acceleration in inflation in the coming months and keeping stagflation on the table. Gross domestic product contracted in the January-March quarter for the first time in three years.

The data was, however, overshadowed by the passage in the U.S. House of Representatives of Trump's "big, beautiful bill," which the nonpartisan Congressional Budget Office estimated would add about $3.8 trillion to the federal government's $36.2 trillion debt in the next decade, if it becomes law. 

Stocks on Wall Street were trading slightly higher and the dollar gained versus a basket of currencies. The 30-year Treasury yield reached its highest level in 19 months before easing.  

LONG UNEMPLOYMENT SPELLS

The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of May's employment report. Claims rose marginally between the April and May survey periods. 

The economy added 177,000 jobs in April. Economists expect job growth to slow below 100,000 per month, the level 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 by 36,000 to a seasonally adjusted 1.903 million during the week ending May 10, moving back to levels last seen in November 2021, the claims report showed. 

"This report suggests that May employment growth should still be decent, though the gradual rise in continuing claims does point to some upward pressure on unemployment," said Abiel Reinhart, an economist at J.P. Morgan. 

Employers' hesitancy to add to headcount 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.

While the labor market is holding up, the housing market continues to struggle and could remain sluggish as the bond market selloff drives up mortgage rates. 

Existing home sales slipped 0.5% in April to a seasonally adjusted annual rate of 4.00 million units, the National Association of Realtors said in a third report.

Sales last month were the slowest for April since 2009, marking a weak start to the spring selling season. Housing inventory soared 9.0% to 1.45 million units, the highest in more than four years.

"The market is slowly but steadily shifting in favor of buyers, but more listings will be needed to bring sales out of the cellar," said Daniel Vielhaber, an economist at Nationwide.

"High mortgage rates and uncertainty about forward financial conditions may cause many buyers to put off a home purchase this year and wait for a more stable environment. We see the housing market slump continuing through the end of the year."