US unemployment claims dip to 197,000, lowest since mid-July

WASHINGTON (AP) — The number of people applying for U.S. unemployment benefits dipped last week to the lowest level since mid-July as layoffs remain low and most American workers enjoy job security.

The Labor Department said Thursday that initial jobless claims ticked down to 197,000 from a revised 198,000 the week before. The four-week average of claims, which smooths out week-to-week volatility, dropped by 2,500 to 200,000.

Claims for jobless benefits are a proxy for layoffs, and economists watch them because they can be a sign of where the job market is headed. So far this year, claims have mostly stayed below 220,000 — historically low.

The American job market has remained sturdy despite higher energy prices that have squeezed businesses and consumers since the fighting with Iran began Feb. 28.

The U.S. on Tuesday reported that U.S. employers posted fewer job openings in August. The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS) also showed that layoffs fell and the number of people quitting their jobs — a sign of confidence in their prospects — retreated slightly in August. The report’s measure of gross hiring — before subtracting people who quit or lost their jobs — ticked up modestly in August but remains at low levels.

“Jobless claims continue to defy expectations and remain exceedingly low, dovetailing with the JOLTS reports’ layoff rate which shows that while businesses aren’t hiring at a rapid pace, they are reticent to let their current crop of workers go,” wrote Matthew Martin, senior U.S. economist at Oxford Economics.

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

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

The Labor Department will release the jobs report for September next week. It’s expected to show that employers added 90,000 jobs and that the unemployment rate remained low at 4.1%, according to a survey of forecasters by the data firm FactSet.

Hiring remains well below the 166,000 monthly jobs created, on average, in 2023 and 2024, and the 491,000 a month recorded during the 2021-2022 hiring boom that followed COVID-19 lockdowns.