US Jobless Claims Fall to 197,000, Lowest Level Since Mid-July

Initial U.S. unemployment claims dropped to 197,000 last week, the Labor Department reported Thursday — the lowest reading since mid-July and the latest sign that layoffs remain historically rare.

The figure slipped from a revised 198,000 the prior week. The four-week average, which smooths out week-to-week volatility, fell by 2,500 to 200,000. So far this year, claims have mostly stayed below 220,000, a level economists consider historically low.

Claims for jobless benefits serve as a proxy for layoffs, and economists watch them closely because they can signal where the job market is headed. On that measure, American workers currently hold unusual leverage: most enjoy solid job security.

What does the claims number say about layoffs?

The resilience is notable given the headwinds. The job market has stayed sturdy despite higher energy prices that have squeezed businesses and consumers since the fighting with Iran began Feb. 28.

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

How fast is hiring actually running?

The national picture splits into two trends. Layoffs are low; hiring is slower too.

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

The current pace still sits well below earlier benchmarks:

• 166,000 jobs a month, on average, in 2023 and 2024
• 491,000 a month during the 2021-2022 post-lockdown hiring boom

What does this mean for your position?

For an individual worker, the data point to a market where holding a job is easier than finding a new one. Employers are protecting headcount rather than cutting it, so separation risk is low — but the modest 80,000 monthly hiring average means fewer openings and longer searches for job switchers and new entrants compared with 2023 and 2024.

What comes next?

The Labor Department will release the September jobs report next week. According to a survey of forecasters by the data firm FactSet, it is expected to show that employers added 90,000 jobs and that the unemployment rate held at a low 4.1%.