Jobless claims near lowest level since 1960s as low fire trend continues

Employers continue to retain workers even as hiring remains weak, sending weekly jobless claims to their lowest levels in nearly six decades.

Initial unemployment insurance claims fell to a seasonally adjusted 194,000 for the week ending Oct. 17, the Labor Department reported Thursday.

This marks another decline in the downward fire trend, with the total just shy of the 189,000 reported for the week of July 18, the lowest since the late 1960s. Claims have averaged 212,000 over the past year, and the four-week rolling average has fallen to 197,750.

These figures come against an uncertain backdrop for the labor market.

Nonfarm payrolls increased by only 29,000 in September and averaged only a gain of 69,000 per month in 2026. The unemployment rate reached 4.2%, an increase largely driven by a surge in labor force participation. Layoffs remained modest, down 61,000 in August, according to Bureau of Labor Statistics data released September 29.

Over the previous 12 months, the layoff rate measured as a proportion of the total workforce fell to 1%, down 0.2 percentage points over the period. Job offers remained relatively stable during the period.

“Despite extremely pessimistic views expressed in consumer confidence surveys regarding the broader economy, countless headlines describing job cuts at various companies, and the phantom job-stealing power of AI, the data suggests that labor market conditions are stable,” Thomas Simons, chief U.S. economist at Jefferies, said in a client note.

The data comes from the base week used by the BLS to calculate the payroll growth figure. The September jobs report will be released on November 5.

Federal Reserve officials will meet next week to release their latest interest rate decision. In recent days, policymakers have pointed to the labor market as a source of overall strength and focused more attention on the worrisome problem of inflation that has kept the pace of price increases well above the central bank’s 2% target.

Markets expect the Fed to delay its rate hike in October, but then implement another quarter-percentage-point increase in December.