U.S. Jobless Claims Fall to 197,000, Lowest Level Since Mid-July

WASHINGTON – New applications for U.S. unemployment benefits fell last week to their lowest level since mid-July, signaling that layoffs remain limited and many American workers continue to have job security.

The Labor Department reported Thursday that initial jobless claims declined to 197,000, down from a revised 198,000 the previous week. The four-week moving average, which helps reduce the impact of weekly fluctuations, fell by 2,500 to 200,000.

Weekly unemployment claims are closely watched as an indicator of layoffs and a potential signal of the labor market’s direction. So far this year, claims have generally remained below 220,000, a historically low level.

The U.S. job market has remained resilient even as rising energy costs have put pressure on businesses and households since fighting with Iran began on Feb. 28.

Layoffs remain subdued, with many businesses still mindful of the labor shortages that followed the end of pandemic lockdowns. Employers have been hesitant to cut staff and continue to hire, although at a much slower pace than in recent years.

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Employers across the private sector, government and nonprofit organizations have added an average of 80,000 jobs per month so far this year, including a stronger-than-expected gain of 162,000 in August. That marks an improvement from a weak 2025, when monthly job growth averaged just 9,700 as elevated interest rates and President Donald Trump’s unpredictable trade policies weighed on hiring.

The Labor Department is scheduled to release its September employment report next week. Forecasters surveyed by data provider FactSet expect the report to show a gain of 90,000 jobs, while the unemployment rate is projected to remain low at 4.1%.

Even so, hiring is running well below the average of 166,000 jobs added each month in 2023 and 2024. It is also far below the pace seen during the post-pandemic hiring surge, when employers added an average of 491,000 jobs per month in 2021 and 2022 after COVID-19 lockdowns ended.