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

The weekly number of Americans filing new claims for unemployment benefits dropped to 197,000, near historic lows, according to the Labor Department. The decrease from 198,000 the previous week signifies a strengthening labor market. Seasonal adjustments for holidays like Labor Day may have contributed to the low figures. Economists also point to residual seasonality, which typically lowers claims as the year concludes.

The four-week moving average of jobless claims fell to 202,250, also a historically low level. Throughout 2025, claims have remained below 220,000, another historically low figure. The data suggests most Americans are still employed, indicating stable job security. The unemployment rate remained steady at 4.1% in August, though long-term unemployment for those who lost jobs was higher.

Citigroup economist Veronica Clark noted that if continuing claims stay low, the unemployment rate could dip to around 4% in the coming months. However, a lower rate due to a smaller labor force might not indicate a tightening labor market. Despite higher energy prices affecting businesses and consumers since Iran tensions began on February 28, job market stability has been maintained.

Layoffs are low, and businesses, aware of labor shortages post-pandemic, are hesitant to reduce staff. So far this year, employers have added an average of 80,000 jobs monthly, with 162,000 jobs added in August. This improvement came after a dismal 2025, when monthly job creation averaged just 9,700. The Labor Department's upcoming September report is expected to show 52,500 jobs added and a 4.1% unemployment rate, according to FactSet's forecast survey.

Hiring remains below the 166,000 monthly jobs created on average in 2023 and 2024, and 491,000 monthly jobs added during the 2021-2022 hiring boom following COVID-19 lockdowns.