More Americans filed for unemployment benefits last week, with the Labor Department reporting on Thursday that claims rose to 206,000 from a revised 204,000 the previous week. The four-week average of claims, which smooths out week-to-week volatility, increased to 207,250. Claims for jobless benefits serve as a proxy for layoffs, and economists monitor them as indicators of job market trends. Over the past year, claims have generally remained within a historically low range of 200,000 to 230,000 per week. The number of individuals collecting unemployment benefits rose slightly to 1.78 million for the week ending August 22, an increase of 8,000 from the prior week. Companies, recalling the worker shortages following the end of COVID-19 lockdowns, are hesitant to reduce their workforce. However, employers are also reluctant to hire new employees. The Labor Department reported that gross hiring fell by 5% to fewer than 5.1 million new jobs. This situation has led to what economists describe as a 'no-hire, no-fire' labor market, where current employees enjoy job security, but young workers and unemployed individuals face challenges in finding entry-level positions. In July, job cuts totaled 23,000 across companies, government agencies, and nonprofits. So far this year, employers have added an average of 61,000 jobs per month, an increase from the 9,700 average in the previous year, which was the weakest hiring outside of a recession since 2002. Factors such as high interest rates and trade policies have contributed to the cautious hiring environment. The Labor Department is expected to release its report on hiring and unemployment for August on Friday, with forecasts suggesting an addition of 65,000 jobs and an increase in the unemployment rate to 4.2%. This hiring rate remains below the average of 166,000 jobs per month recorded in 2023 and 2024, and significantly lower than the 491,000 monthly jobs added during the hiring boom of 2021-2022 following pandemic lockdowns.
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US unemployment claims increase to 206,000 amid low layoffs and jobless claims
The Labor Department reported an increase in unemployment claims to 206,000 last week, with the four-week average rising to 207,250. Despite low layoffs, hiring remains cautious, with employers adding an average of 61,000 jobs per month this year, significantly below pre-pandemic levels. The upcoming Labor Department report is expected to show an addition of 65,000 jobs in August.
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US unemployment claims rise to 206K — but layoffs and jobless claims at historically low levels
US unemployment claims increase to 206,000 amid low layoffs and jobless claims