WASHINGTON– The number of people seeking unemployment benefits in the United States fell last week to its lowest level since mid-July, as layoffs remain low and most American workers enjoy job security.
The Labor Department said Thursday that initial jobless claims fell to 197,000 from a revised 198,000 the previous week. The four-week claims average, which smooths out week-to-week volatility, fell from 2,500 to 200,000.
Jobless claims are an indicator of layoffs, and economists watch them because they can be a sign of where the job market is heading. So far this year, claims have mostly remained below 220,000 – a historic low.
The U.S. labor market has remained strong despite rising energy prices that have strained businesses and consumers since fighting with Iran began on Feb. 28.
The United States reported Tuesday that American employers posted fewer job openings in August. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) also showed that layoffs declined and the number of people who left their jobs – a sign of confidence in their prospects – fell slightly in August. The report’s measure of gross hiring — before subtracting people who quit or lost their jobs — increased slightly in August but remains at low levels.
“Unemployment claims continue to defy expectations and remain extremely low, consistent with the JOLTS reporting layoff rate that shows that while businesses are not hiring at a rapid pace, they are reluctant to lay off their current crop of workers,” wrote Matthew Martin, senior U.S. economist at Oxford Economics.
Layoffs are low. Companies, remembering the labor shortages that followed the end of pandemic lockdowns, are reluctant to lay off staff. They are hiring – but modestly by the standards of recent years.
Since the start of the year, employers (businesses, government agencies and nonprofits) have added an average of 80,000 jobs per month, including a surprising 162,000 in August. That’s an improvement from a lackluster 2025, when monthly job creation averaged 9,700 as high interest rates and President Donald Trump’s unpredictable trade policies discouraged hiring.
The Labor Department will release the September employment report next week. It is expected to show that employers added 90,000 jobs and the unemployment rate remained low at 4.1%, according to a survey of forecasters by data firm FactSet.
Hiring remains well below the 166,000 monthly jobs created on average in 2023 and 2024, and the 491,000 per month recorded during the 2021-2022 hiring boom that followed COVID-19 lockdowns.
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