US unemployment claims dip to 206,000 as layoffs continue to remain rare

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WASHINGTON (AP) — Slightly fewer Americans filed for unemployment claims last week as jobless claims remain at historically low levels and layoffs are still relatively rare.

Filings for benefits dipped to 206,000 last week from a revised 207,000 the week before, the Labor Department reported Thursday. The four-week average of claims, which smooths out week-to-week volatility, also fell modestly to 206,000.

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. For the past year, claims have mostly stayed within a historically low range of 200,000 to 230,000 a week.

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

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 80,000 jobs a month, including a surprising 162,000 in August. That is an improvement on a dismal 2025 when monthly job creation averaged less than 10,000 as high interest rates and President Donald Trump's erratic trade policies discouraged hiring.

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