Jobless Claims Drop
U.S. Jobless Claims Fall to 196,000 in Lowest Level Since Mid-July
Anonymous
Key Points
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Federal employees’ initial unemployment claims edged up by 10 to 398, still a historically low level, a figure economists are watching amid efforts by the Trump administration to reduce the size of the government workforce.
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Some indicators suggest hiring demand may be strengthening: job postings on Indeed have risen in recent weeks, while ADP reported that private employers added an average of 16,250 jobs per week in the four weeks ending Aug. 29.
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Federal Reserve Chairman Kevin Warsh described the labor market as “one basic sign of strength” and said policymakers viewed the unemployment rate as consistent with full employment; the Fed raised its benchmark rate by 25 basis points to a 3.75%-4.00% range.
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Although job creation has improved from 2025, when monthly employment growth averaged just 9,700, this year’s average of about 80,000 jobs per month remains below the 166,000 monthly average in 2023 and 2024 and far below the 491,000 average during the 2021-22 post-pandemic hiring boom.
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The latest claims total was about 37,000 lower than the 233,000 recorded for the comparable week a year earlier, underscoring how unusual the current level of layoffs remains despite the economy’s modest hiring pace.
U.S. jobless claims fell to 196,000 in the week ending Sept. 12, the lowest level since mid-July, according to Labor Department data. Initial claims dropped 10,000 from the prior week and came in well below economists' expectations, suggesting layoffs remain rare and the job market is holding up despite modest hiring gains.
The four-week moving average declined to 203,250, and continuing claims fell to 1.73 million—their lowest level since January 2024, according to WXXV25. Because the week included Labor Day, seasonal adjustments may have made the single-week drop look larger than it really was, making the four-week average a more reliable measure of true labor market trends.
Layoffs Remain Rare Despite Modest Job Growth
The 196,000 figure marks a drop of 37,000 claims from the same week last year, underscoring how tight layoffs have become. Yet hiring has slowed significantly. Monthly job creation averaged just 80,000 so far this year, well below the 166,000 monthly average in 2023 and 2024, and a fraction of the 491,000 monthly average during the post-pandemic boom of 2021–2022, according to Labor Department data.
Some fresh signs suggest hiring demand may be picking up. Indeed reported that job postings have risen in recent weeks, while ADP found that private employers added an average of 16,250 jobs per week in the four weeks ending Aug. 29, according to Scripps News.
Fed Sees Labor Market as "One Basic Sign of Strength"
Federal Reserve Chairman Kevin Warsh called the labor market "one basic sign of strength" and said policymakers viewed the unemployment rate as consistent with full employment. The Fed raised its benchmark interest rate by 25 basis points to a 3.75%–4.00% range, according to TipRanks.
The low layoff figures give the central bank more room to focus on inflation, which has remained sticky in multiple product categories. Bloomberg reported that Warsh emphasized the need for rate tightening despite pushback from the Trump administration, which has called for rates to be cut to 1% or lower.
Federal Workers' Jobs Stable Amid Government Shrinkage Efforts
Initial unemployment claims for federal employees edged up by just 10 to 398, still a historically low level. Economists are watching this figure closely as the Trump administration pursues efforts to reduce the size of the federal workforce, according to Labor Department data.
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