US Jobless Claims Fall to 197,000 as Layoffs Hit 1960s-Era Lows

First-time unemployment claims in the United States fell to 197,000 last week, down from a revised 199,000 the week before, the Labor Department reported Thursday. It was the fourth consecutive week that new claims stayed below 200,000 — a level of sustained layoffs not seen since the 1960s.

The four-week average, which smooths out week-to-week volatility, dropped by 2,500 to 198,000. So far this year, claims have held below 220,000, historically low territory.

"An incredibly low level of layoffs for a sustained period of time that hasn't been seen since the 1960s," said Heather Long, chief economist at the Navy Federal Credit Union.

What do the claims numbers signal?

Jobless claims are a proxy for layoffs, and economists track them as an early indicator of where the labor market is heading. The current readings suggest most companies are confident enough in the economy and their sales to hold onto workers.

But the picture has two sides. Hiring has been sluggish, producing what analysts describe as a "low-hire, low-fire" job market. Last month, the unemployment rate ticked up to a still-low 4.2%.

Where does that leave job seekers?

For employed workers, the data points to strong job security. For those already out of work, the market is considerably harder. The number of people unemployed for more than six months has reached a five-year high, Long noted.

The September jobs report underscored the hiring slowdown. Businesses and other employers added just 29,000 jobs in September, down from 133,000 in August and below what economists had forecast.

One mitigating factor: with population growth slowing and immigration into the United States dropping, the economy does not need to generate as many jobs each month to keep the unemployment rate low.

The next weekly claims release will show whether the sub-200,000 streak — and the unusual stability it signals for employed Americans — extends into October.