US weekly jobless claims fall to 197,000, near historic lows as layoffs stay low

New claims for unemployment benefits in the U.S. fell to 197,000 last week, indicating a strengthening labor market. 

The number of Americans filing new claims for unemployment benefits fell last week, pointing to a firming labour market.

The Labour Department show that 197,000 people filed for unemployment benefits last week, down from a revised 198,000 the week before.

Claims are near 57-year lows, partly due to difficulties seasonally adjusting the data around moving holidays such as Labour Day. Economists have also noted what they call residual seasonality, which tends to push claims lower as the year winds down.

Meanwhile, the four-week moving average of jobless claims, which helps smooth out weekly fluctuations, also declined to 202,250 from 204,000 a week earlier.

In fact, so far this year, claims have mostly remained below 220,000, which also a historically low level.

Job security remains broadly intact

The new data suggest that most Americans remain employed, indicating that job security has broadly held up.

Economists view continuing claims as consistent with a stable jobless rate. The unemployment rate was unchanged at 4.1% in August, though the data showed more people who had lost their jobs were experiencing long bouts of joblessness.

“After having been stable over the last few months, if continuing claims remain at lower levels, this could mean an unemployment rate closer to 4% over the next few months,” Veronica Clark, an economist at Citigroup told Reuters. "But we would caution that a lower unemployment rate because of a smaller labor force would not necessarily imply a retightening labor market."

Hiring remains modest despite sturdy job market

The American job market has remained sturdy despite higher energy prices that have squeezed businesses and consumers since the fighting with Iran began Feb. 28.

Layoffs are low. Businesses, remembering the labor shortages that followed the end of pandemic lockdowns, are reluctant to let go of staff. They’re hiring — but modestly by the standards of recent years.

So far this year, employers — companies, government agencies and nonprofits — have been adding an average 80,000 jobs a month, including a surprising 162,000 in August. That is an improvement on a dismal 2025 when monthly job creation averaged 9,700 as high interest rates and President Donald Trump’s unpredictable trade policies discouraged hiring.

September jobs report due next week

The Labor Department will release the jobs report for September next week. It's expected to show that employers added 52,500 jobs and that the unemployment rate remained low at 4.1%, according to a survey of forecasters by the data firm FactSet.

Hiring remains well below the 166,000 monthly jobs created, on average, in 2023 and 2024, and the 491,000 a month recorded during the 2021-2022 hiring boom that followed COVID-19 lockdowns.