Claims for unemployment benefits drop to 196,000, lowest since mid-July

Last week, the number of people applying for unemployment benefits fell sharply to 196,000, the lowest since mid-July, according to the Labor Department. This marked another indication that layoffs remain rare and most Americans maintain job security, the department reported on Thursday. The four-week average of claims, which smooths out week-to-week fluctuations, also decreased to 203,250. Economists had anticipated claims to total 207,500, as per a survey conducted by data firm FactSet.

Claims for jobless benefits serve as a proxy for layoffs, and economists closely monitor them, as they can offer insight into the direction of the job market. Since the beginning of the year, claims have typically remained within a historically low range of 200,000 to 230,000 per week. The U.S. job market has remained robust despite surging gasoline prices that have pressured businesses and households since the conflict with Iran commenced on February 28.

Despite higher fuel costs, businesses have been cautious about layoffs due to the lingering labor shortages that emerged following the end of pandemic lockdowns. Companies are now hiring, albeit modestly by recent standards. So far in 2025, employers—comprising companies, government agencies, and nonprofits—have added an average of 80,000 jobs each month, including a notable 162,000 in August.

This represents an improvement from the dismal 9,700 monthly job creations in 2025, driven by high interest rates and President Donald Trump's erratic trade policies. However, the current monthly job creation remains well below the 166,000 jobs created on average in 2023 and 2024, and the 491,000 jobs added per month during the 2021-2022 hiring surge following the COVID-19 lockdowns.