As Federal Reserve officials gathered for their latest interest-rate decision, Thomas Simons, chief US economist at Jefferies, pointed to the jobless-claims data as evidence of stable labour-market conditions despite pessimistic consumer confidence surveys, business job-cut announcements and concerns about artificial intelligence’s effect on employment.
The Labour Department said on Thursday that initial filings for unemployment insurance fell by 6,000 to a seasonally adjusted 194,000 in the week ending October 17. The reading was below the 200,000 claims economists had expected in a Reuters poll.
It was close to the 189,000 recorded in the week of July 18, the lowest level since the late 1960s. Claims have stayed below 230,000 in every week this year, and the four-week moving average has fallen to 197,750.
The figures point to a labour market in which dismissals remain scarce. Layoffs declined by 61,000 in August, while the layoff rate over the previous 12 months fell to 1% of the workforce, down 0.2 percentage point over that period. Most Americans therefore retain extraordinary job security.
Hiring tells a far weaker story. Nonfarm payrolls rose by just 29,000 in September and have averaged gains of only 69,000 a month in 2026. That is well below the average of 166,000 monthly jobs created in 2023 and 2024, and the 491,000 a month recorded during the 2021-2022 hiring boom after COVID-19 lockdowns.
Economists call the combination a “low-hire, low-fire” labour market: employers are adding few workers while layoffs remain rare. Job openings were relatively flat during the period.
There are still signs that some workers who lose jobs are taking longer to find another one. Continuing claims, which measure people receiving unemployment benefits after an initial filing, rose by 25,000 to 1.728 million in the week ending October 10. The unemployment rate stood at 4.2%, while the seasonally adjusted insured unemployment rate was unchanged from the previous week at 1.1%.
State data showed pockets of pressure. Unadjusted initial claims for the week ending October 10 rose by 3,918 in Ohio, which cited manufacturing layoffs. Tennessee recorded an increase of 3,477, citing layoffs in educational services and manufacturing.
The split between resilient layoffs and weak hiring matters to the Fed as it weighs its next move. Markets expect the central bank to hold off on a rate hike in October, then make another quarter percentage point increase in December.
The next scheduled test of the hiring picture will come with the September jobs report, due on November 5.
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